Cost of Production Report: Average Cost Method Use the average cost method with
ID: 2330812 • Letter: C
Question
Cost of Production Report: Average Cost Method
Use the average cost method with the following data:
Prepare a cost of production report for the Cutting Department of Tanner Carpet Company for December 2016 using the average cost method. If required, round your cost per equivalent unit answer to two decimal places.
Work in process, December 1, 6,700 units, 70% completed $52,997 Materials added during December from Weaving Department, 126,600 units 972,288 Direct labor for December 239,818 Factory overhead for December 145,589 Goods finished during December (includes goods in process, December 1), 123,900 units — Work in process, December 31, 9,400 units, 10% completed —Explanation / Answer
Cost of production report :
Units charged to production: Inventory in process, December 1 6700 Received from Weaving Department 126600 Total units accounted for by the Cutting Department 133300 Units to be assigned costs: Whole unit Equivalent unit of production Transferred to finished goods in December 123900 123900 Inventory in process, December 31 9400 9400*10% = 940 Total units 133300 124840 Cost information Costs per equivalent unit: 11.30 Costs Total costs for December in Cutting Department 1410692 Total equivalent units 124840 Cost per equivalent unit 11.30 Costs assigned to production: Inventory in process, December 1 52997 Costs incurred in December 1357695 Total costs accounted for by the Cutting Department 1410692 Costs allocated to completed and partially completed units Transferred to finished goods in December 1400070 Inventory in process, December 31 10622 Total costs assigned by the Cutting Department 1410692