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Homework answers / question archive / Exercise 3-7 (Video) The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2020, the first month of operation

Exercise 3-7 (Video) The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2020, the first month of operation

Accounting

Exercise 3-7 (Video)

The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2020, the first month of operation.

Production: 6,000 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs.

Manufacturing costs: Materials $27,000; labor $20,500; overhead $29,000.

Prepare a production cost report.

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Materials
  
Conversion Costs
Costs in March       $20,500 + $29,000 = $49,500
         
Unit costs   $27,000 ÷ 9,000 = $3.00   $49,500 ÷ 6,600 = $7.50

 

Work in process, March 31 (Conversion Costs)  =  (3,000 × 20%)  =  600
         
Transferred out  =  (6,000 × $10.50)  =  $63,000
Materials  =  (3,000 × $3.00)  =  $9,000
Conversion costs  =  (600 × $7.50)  =  $4,500


(DM: $27,000 ÷ (6,000 + 3,000) = $3.00)

(DM: DM costs ÷ (Units transferred out + Units in end. WIP) = DM cost/unit)

(CC: ($20,500 + $29,000) ÷ (6,000 + (3,000 x 20%)) = $7.50)

(CC: (DL + OH costs) ÷ (Units transferred out + (Units in end. WIP x % complete) = CC/unit)

QUIK FURNITURE COMPANY
Sanding Department
Production Cost Report
For the Month Ended March 31, 2020
Equivalent Units
Quantities
Physical
Units

Materials
Conversion
Costs
Units to be accounted for
   Work in process, March 1
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   Started into production
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      Total units
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Units accounted for
   Transferred out
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   Work in process, March 31
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      Total units
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Costs

Materials
Conversion
Costs

Total
Unit costs
   Total Costs
$
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$
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$
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   Equivalent units
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   Unit costs
$
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$
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$
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Costs to be accounted for
   Work in process, March 1
$
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   Started into production
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      Total costs
$
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Cost Reconciliation Schedule
Costs accounted for
   Transferred out
$
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   Work in process, March 31
      Materials
$
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      Conversion costs
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   Total costs
$
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