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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.
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.
Expert Solution
|
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)
Sanding Department
Production Cost Report
For the Month Ended March 31, 2020
Units
Materials
Costs
*
Materials
Costs
Total
*
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