Polk Company manufactures basketballs. Materials are added at the beginning of t
ID: 2413220 • Letter: P
Question
Polk Company manufactures basketballs. Materials are added at the beginning of the p as follows. n process and conversion costs are incurred uniformly. Production and cost data for the month of July 2017 are Percent Production Data-Basketballs Work in process units, July 1 Units started into production Work in process units, July 31 Cost Data-Basketball Work in process, July 1 Units Complete 500 1,000 600 60 % 40% Materials $750 Conversion costs Direct materials Direct labor Manufacturing overhead 600 $1,350 2,400 1,580 1,240 Calculate the equi ivalent units of production for materials and conversion costs. Materials Conversion Costs Equivalent Units Calculate the unit costs of production for materials and conversion costs. (Round unit costs to 3 decimal places, e.g. 2.257.) Materials Conversion Costs Cost per unit Calculate the assignment of costs to units transferred out and in process at the end of the accounting period. (Round answers to 0 decimal places, e.g. 2,250.) Costs accounted for: Transferred out Work in process, July 31 Materials Conversion costs Total costs Prepare a production cost report for the month of July for the basketballs. (Round unit costs to 3 decimal places, e.g. 2.257 and all other answers to 0 decimal places, e.g. 2,250.) POLK COMPANY Production Cost Report For the Month Ended July 31, 2017 Equivalent Units Physical Units Quantities eMaterials Costs Units to be accounted for Work in process, July 1 Started into production Total units nits accounted for Work in process, July 31 Total unitsExplanation / Answer
Solution:-
Answer 1
Equivalent units of production for materials and conversion
Data
Units
% Complete
Equivalent % for units
Equivalent Units
Opening WIP
500
60%
40%
200
Units Introduced
1000
100%
1000
Closing WIP
600
40%
40%
240
1440
For Materials
1440
For Conversion
1440
Note: - The above is solved with the assumption that the % for conversion and material is same since no information is given for the conversion separately. Also, for opening balance the balance % i.e. 40% is taken, since 60% would have been completed last year itself
Answer 2
Unit cost of production for material and conversion
Data
Cost
Units
Cost per unit
Material (750+2400)
3150
1440
2.188
Conversion
600
1440
0.417
Answer 3
Cost Accounted for
Units
Cost per unit
Total cost
Transferred out (500+1000-600)
900
2.188
1968.75
Closing WIP
Material
600
2.188
1312.5
Conversion Cost
600
0.417
250
Total Cost
3531.25
Answer 4
Production Cost report
Quantities
Physical
Equivalent Units
Materials
Conversion cost
Units to be accounted for
Opening WIP
500
Introduced in production
1000
Total Units
1500
Units accounted for
Transferred out (100%)
900
900
900
Closing WIP (40%)
600
240
240
Total Units
1500
1140
1140
Answer 1
Equivalent units of production for materials and conversion
Data
Units
% Complete
Equivalent % for units
Equivalent Units
Opening WIP
500
60%
40%
200
Units Introduced
1000
100%
1000
Closing WIP
600
40%
40%
240
1440
For Materials
1440
For Conversion
1440
Note: - The above is solved with the assumption that the % for conversion and material is same since no information is given for the conversion separately. Also, for opening balance the balance % i.e. 40% is taken, since 60% would have been completed last year itself
Answer 2
Unit cost of production for material and conversion
Data
Cost
Units
Cost per unit
Material (750+2400)
3150
1440
2.188
Conversion
600
1440
0.417
Answer 3
Cost Accounted for
Units
Cost per unit
Total cost
Transferred out (500+1000-600)
900
2.188
1968.75
Closing WIP
Material
600
2.188
1312.5
Conversion Cost
600
0.417
250
Total Cost
3531.25
Answer 4
Production Cost report
Quantities
Physical
Equivalent Units
Materials
Conversion cost
Units to be accounted for
Opening WIP
500
Introduced in production
1000
Total Units
1500
Units accounted for
Transferred out (100%)
900
900
900
Closing WIP (40%)
600
240
240
Total Units
1500
1140
1140