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Ritchie Company has two departments
Ritchie Company has two departments. Its first department (the Melting Department) shows the following data for the month of April:
Work in process, beginning:
Units in process
400
Stage of completion with respect to materials
60%
Stage of completion with respect to conversion
85%
Costs in the beginning inventory:
Materials cost
$170
Labour cost
$160
Overhead cost
$300
Units started into production during the month
1,100
Units completed and transferred out
1,400
Costs added to production during the month:
Materials cost
$1,300
Labour cost
$800
Overhead cost
$1,700
Work in process, ending:
Units in process
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Stage of completion with respect to materials
70%
Stage of completion with respect to conversion
80%
Required:
Using the weighted average method, prepare a production cost report for the company.
Expert Solution
| RITCHIE COMPANY | |||||
| Melting Department | |||||
| Production Cost Report | |||||
| For the Month Ended April 30 | |||||
| Equivalent Units | |||||
| UNITS | Physical Units | Materials | Labor | Overhead | |
| Units to be accounted for: | |||||
| Work in process, beginning | 400 | ||||
| Started into production | 1100 | ||||
| Total units | 1500 | ||||
| Units accounted for: | |||||
| Completed and transferred out (100%) | 1400 | 1400 | 1400 | 1400 | |
| Work in process, ending (1500-1400) (70%;80%) | 100 | 70 | 80 | 80 | |
| Total units | 1500 | 1470 | 1480 | 1480 | |
| COSTS | |||||
| Unit costs: | Materials | Labor | Overhead | Total | |
| Total costs in April $ | 1470 | 960 | 2000 | 4430 | |
| Equivalent units | 1470 | 1480 | 1480 | ||
| Unit costs (Total Cost / Equivalent Units) | 1.00 | 0.65 | 1.35 | 3.00 | |
| Costs to be accounted for: | |||||
| Work in process, beginning $ | 170 | 160 | 300 | 630 | |
| Costs incurred during April | 1300 | 800 | 1700 | 3800 | |
| Total costs to be accounted for $ | 1470 | 960 | 2000 | 4430 | |
| Cost Reconciliation Schedule | |||||
| Costs accounted for: | |||||
| Cost of units completed and transferred out | |||||
| Materials (1400 * $1.00) | 1400 | 1400 | |||
| Labor (1400 * $0.65) | 910 | 910 | |||
| Overhead (1400 * $1.35) | 1890 | 1890 | |||
| Total cost of units completed and transferred | 4200 | ||||
| Cost of work in process, ending $ | |||||
| Materials (70 * $1.00) | 70 | 70 | |||
| Labor (80 * $0.65) | 52 | 52 | |||
| Overhead (80 * $1.35) | 108 | 108 | |||
| Total cost of ending work in process $ | 230 | ||||
| Total costs accounted for $ | 4430 | ||||
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