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Horngren'S Financial And Managerial Accounting
Found in: Page 1025

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Short Answer

Salish Craft Beers provides the following information for the Malting Department for the month of August 2018:

UNITSCOSTS

Beginning Work-in-Process Inventory

0

$0

Started in Production in August

26,000

54,000*

Total to Account For

26,000

$54,000

Completed and Transferred to Packaging Department during August

21,000

?

Ending Work-in-Process Inventory (30% complete for direct materials and 60% complete for conversion work)

5,000

?

Total Accounted For

26,000

$54,000

* Includes $18,000 direct materials and $36,000 conversion costs

Requirements

Complete a production cost report for the Malting Department for the month of August 2018 to determine the cost of the units completed and transferred out, and the cost of the ending Work-in-Process Inventory. Assume Salish Craft Beers uses the weighted average method.

UNITSCOSTS

Beginning Work-in-Process Inventory

0

$0

Started in Production in August

26,000

54,000*

Total to Account For

26,000

$54,000

Completed and Transferred to Packaging Department during August

21,000

48,300

Ending Work-in-Process Inventory (30% complete for direct materials and 60% complete for conversion work)

5,000

5,700

Total Accounted For

26,000

$54,000

* Includes $18,000 direct materials and $36,000 conversion costs

The cost of completed and transferred units is $48,300, and for the WIP units are $5,700.

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Step by Step Solution

Step-by-Step Solution:Step 1: Production cost report

The companies prepare a production cost report using the process costing system while determining the total manufacturing cost. It shows the detailed costing of the products.

Step 2: Equivalent unit of production for direct materials

Step 3: Equivalent unit of production for conversion costs

Step 4: Direct material cost per EUP

Step 5: Conversion cost per EUP

Step 6: Total cost of completed units

Step 7: Total cost of WIP units

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