Cost of Production Report; Originating; Average costing. Tyndol Fabricators inc.
ID: 2477639 • Letter: C
Question
Cost of Production Report; Originating; Average costing. Tyndol Fabricators inc. manufactures a product in two departments. The product is cut out of sheet metal and bent to shape in the cutting and forming department and then transferred to the assembling department, where parts purchased from outside vendors are added to the base unit. Since only one product is manufactured by the company, a process cost system is used . The company uses the average cost flow assumption to account for its work in process inventories. Data related to November operations in the cutting and forming department are:
Units in Beggining Inventory..............................................................................800
Units started in process this period...................................................................3200
Units tranferred to assembling Depatment this period......................................3400
Units in ending inventory(75% materials,40% labor, 25% overhead)............... 600
Costs charged to the department: Beggining Added
Inventory This Period
Materials.....................................................................$17,923 $ 68,625
Direct Labor ...............................................................2,352 14,756
Factory overhead........................................................3,800 29,996
Required: Prepare a November cost of production report for the cutting and forming department using Average costinng.
Explanation / Answer
Tyndol Fabricators inc. Production Report For The Month of November (Weighted Average Method) Unit Information Physical Flow Units Accounted For Units Accounted For Units in Beggining Inventory(WIP) 800 Units tranferred to assembling Depatment 3,400 Units started in process this period 3,200 Units in ending inventory (WIP) 600 Total Units Accounted For 4,000 4,000 Equivalent Units Units tranferred to assembling Depatment 3,400 Material Labour Overhead Equivalent Units Transferred Out (a) 3400 3400 3400 % of Completion 75 40 25 Equivalent Units in ending inventory (b) 450 240 150 Total Equivalent units (a+b) 3850 3640 3550 Cost Charged to Department Total$ Equivalent Units Total Cost$ Unit Cost$ Beginning Inventory Material 17,923 Labour 2,352 Overhead 3,800 Total cost in beginning inventory 24,075 Cost added during the current period Material 68,625 3,850 86,548 22.48 Labour 14,756 3,640 17,108 4.7 Overhead 29,996 3,550 33,796 9.52 Total Cost Charged to department 113,377 36.7 Cost accounted for as follows Units % of Completion Unit Cost$ Total Cost$ Units tranferred to assembling Depatment 3,400 100 36.7 124,780 Work in process ending inventory Material 600 75 22.48 10,116 Labour 600 40 4.7 1,128 Overhead 600 25 9.52 1,428 12,672 Total Cost accounted for 137,452