COST ACCOUNTING COST OF PRODUCTION SUMMARY: WEIGHTED AVERAGE AND FIFO METHODS Th
ID: 2556866 • Letter: C
Question
COST ACCOUNTING
COST OF PRODUCTION SUMMARY: WEIGHTED AVERAGE AND FIFO METHODS
The Company uses a single department production process. Materials are added at the start of the production process and labor and overhead are added as indicated. For January 2015, the Company records have the following information:
UNITS:
Beginning WIP: 10,000 units
100% complete for materials, 50% complete for labor; 30% complete for overhead
Units started in process 50,000 units
Units completed 49,000 units
Ending WIP: 11,000 units
100% complete for materials, 60% complete for labor; 20% complete for overhead
PRODUCTION COSTS:
Work in Process, Beginning of the Month:
Materials $ 22,000
Labor 18,000
Overhead 11,000 51,000
Current Month Costs:
Materials $ 320,000
Labor 180,160
Overhead 152,840 653,000
Total Costs: $ 704,000
REQUIRED:
Prepare a Cost of Production Summary using the weighted average method (calculations for equivalent units of production, cost per equivalent unit of production, total cost for units completed and WIP, ending). Prepare your calculations for Materials, Labor, and Overhead separately.
Prepare the appropriate journal entries at month end.
Prepare a Cost of Production Summary using the FIFO method (calculations for equivalent units of production, cost per equivalent unit of production, total cost for WIP, beginning, units started and completed and WIP, ending). Prepare your calculations for Materials, Labor, and Overhead separately.
Prepare the appropriate journal entries at month end.
You need to present your work in an excel spreadsheet and you need to create your own formatting (templates).
Explanation / Answer
Solution 1:
Solution 2:
Computation of Equivalent unit of Production - Weighted Average Particulars Physical Units Material Labor Overhead Unit completed & Transferred out 49000 49000 49000 49000 Closing WIP: 11000 Material (100%) 11000 Labour (60%) 6600 Overhead (20%) 2200 Equivalent units of production 60000 60000 55600 51200