Cost of Production Report: No Beginning Inventories Oregon Paper Company produce

Question

Cost of Production Report: No Beginning Inventories
Oregon Paper Company produces newsprint paper through a special recycling process using scrap paper products. Production and cost data for October 2009, the first month of operations for the company's new Portland plant, follow:

Raw materials are added at the beginning of the process for each unit of product produced, and labor and manufacturing overhead are added evenly throughout the manufacturing process. Manufacturing overhead is applied to Work-in-Process at the rate of $24 per machine hour. Units in process at the end of the period were 65 percent converted.

Prepare a cost of production report for Oregon Paper Company for October. (Round answers to the nearest whole number unless otherwise noted.)

Units of product started in process during October 90,000 tons Units completed and transferred to finished goods 75,000 tons Machine hours operated 10,000 Direct materials costs incurred $495,000 Direct labor costs incurred $182,055

Explanation / Answer

Opening Inventry = NIL Units started in process = 90000 tonns Units completed & transfer to finished goods = 75000 tonns Machine hours = 10000 hrs Material cost = 495000 $ Labour cost = 182055 $ Manufacturinh overhear = $24 per machine hour Units converted = 65% Oregon Pper company Cost Production Report For the month ended oct,31, 2009 Summary of units in process Beginning NIL Units started 90000 In process 58500 Completed 75000 Eqivalent unit in process: Units completed

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