Chapter 18: Q9RQ (page 1005)
Question: What is a production cost report?
Answer:
Production cost report is the report that shows in detail total cost, including the raw material and operating costs, of manufacturing the products.
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Question: Evergreen Orange manufactures orange juice. Last month’s total manufacturing costs for the Tampa operation included:
Direct materials | $450,000 |
Direct labor | 32,000 |
Manufacturing overhead | 125,000 |
What was the conversion cost for Evergreen Orange’s Tampa operation last month?
Bert’s Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process. January data for the Preparation Department are as follows:
UNITS | |
Beginning work-in-process inventory | 0 sheets |
Started in production | 3,800 sheets |
Completed and transferred out to compression in January | 2,900 sheets |
Ending work-in-process inventory (30% of the way through the preparation process) | 900 sheets |
COSTS | |
Beginning work-in-process inventory | $0 |
Costs added during January | |
Wood | 2,888 |
Adhesive | 1,914 |
Direct labor | 987 |
Manufacturing overhead allocated | 2,500 |
Total costs | 8,289 |
Requirements
1. Prepare a production cost report for the Preparation Department for January. The company uses the weighted-average method. (Hint: Each direct material added at a different point in the production process requires its own equivalent units of production computation.)
2. Prepare the journal entry to record the cost of the sheets completed and transferred out to the Compression Department.
3. Post the journal entries to the Work-in-Process Inventory—Preparation T-account. What is the ending balance?
Question: The Mixing Department of Complete Foods had 62,000 units to account for in October. Of the 62,000 units, 38,000 units were completed and transferred to the next department, and 24,000 units were 20% complete. All of the materials are added at the beginning of the process. Conversion costs are added evenly throughout the mixing process and the company uses the weighted-average method.
Compute the total equivalent units of production for direct materials and
conversion costs for October.
Question: Spring Fresh produces premium bottled water. Spring Fresh purchases artesian water, stores the water in large tanks, and then runs the water through two processes: filtration and bottling.
During February, the filtration process incurred the following costs in processing
200,000 liters:
Wages of workers operating filtration equipment | $19,950 |
Manufacturing overhead allocated to filtration | 20,050 |
Water | 110,000 |
Spring Fresh had no beginning Work-in-Process Inventory in the Filtration Department in February and uses the weighted-average method.
Requirements
1. Compute the February conversion costs in the Filtration Department.
2. The Filtration Department completely processed 200,000 liters in February. What was the filtration cost per liter?
Work Problem P18-33A using the FIFO method. The Mixing Department beginning work in process of 300 units is 40% complete as to both direct materials and conversion costs. Round equivalent unit of production costs to four decimal places. Round all other costs to the nearest whole dollar.
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