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ruskin ruskin
wrote...
Posts: 664
6 years ago
Silver Spoon Incorporated is a manufacturer of kitchen utensils. It produces all of its products in one department. The information for the current month is as follows:

   Beginning work-in-process   37,500 units
   Units started   55,000 units
   Units completed   75,000 units
   Ending work-in-process   14,500 units
   Spoilage   3,000 units

   Beginning work-in-process direct materials   $25,000
   Beginning work-in-process conversion   $ 10,000
   Direct materials added during month   $113,750
   Direct manufacturing labour during month   $40,020

Beginning work-in-process was 25% complete as to conversion. Direct materials are added at the beginning of the process. Factory overhead is applied at a rate equal to 37.5% of direct manufacturing labour. Ending work-in-process was 60% complete. All spoilage is normal and is detected at the end of the process.

Required:
Prepare a production cost worksheet if spoilage is recognized and the weighted-average method is used.
Textbook 
Cost Accounting: A Managerial Emphasis, Canadian Edition

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
Authors:
Read 136 times
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Replies
wrote...
6 years ago
PRODUCTION COST WORKSHEET

Flow of Production   Physical units   Direct materials   Conversion
Work-in- process, beginning   37,500
Started during period   55,000
   To account for   92,500

Good units completed   75,000   75,000   75,000
Normal spoilage   3,000   3,000   3,000
Work-in-process, ending   14,500   14,500   8,700
   Accounted for   92,500   92,500   86,700

Costs   Totals   Direct Materials   Conversion
Work-in-process, beginning   $ 35,000   $25,000   $ 10,000
Costs added during period   168,778   113,750   55,028

Total costs to account for   $203,778   $138,750   $65,028
Divided by equivalent units        92,500   86,700
   Equivalent unit costs   $ 2.25   $ 1.50   $ 0.75

Assignment of costs
Costs transferred out (75,000 × $2.25)      $ 168,750
Normal spoilage (3,000 × $2.25)      6,750
Work-in- process, ending
Direct materials (14,500 × $1.50)      21,750
Conversion (14,500 × $0.75 × 0.60)      6,525
Costs accounted for      $203,775
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