Required prepare a production report for the blending


Question 1 - Pureform, Inc., manufactures a product that passes through two departments. Data for a recent month for the first department follow:


Units

Materials

Labor

Overhead

Work in process, beginning

73,000

$350,000

$28,000

$41,000

Units started in process

760,000




Units transferred out

780,000




Work in process, ending

53,000




Cost added during the month


$920,000

$390,000

$590,000

The beginning work in process inventory was 80% complete with respect to materials and 60% complete with respect to processing. The ending work in process inventory was 75% complete with respect to materials and 50% complete with respect to processing. The company uses the weighted-average method of accounting for units and costs

Requirement 1: (a) Prepare a quantity schedule for the month for the first department.

(b) Compute the equivalent units for the month for the first department.

Requirement 2: Determine the costs per equivalent unit for May.

Question 2 - Helox, Inc., manufactures a product that passes through two production processes. A quantity schedule for the month of May for the first process follows:


Quantity Schedule

Units to be accounted for:


Work in process, May 1 (materials 100% complete; conversion 40% complete)

5,000

Started into production

180,000

Total units to be accounted for

185,000

Costs in the beginning work in process inventory of the first processing department were: materials, $1,500; and conversion cost, $4,000 Costs added during the month were: materials, $54,000; and conversion cost, $352,000.

Requirement 1: Assume that the company uses the weighted-average method of accounting for units and costs. Determine the equivalent units for the month for the first process.

Requirement 2: Compute the costs per equivalent unit for the month for the first process.

Question 3 - Helox, Inc., manufactures a product that passes through two production processes. The company uses the weighted-average method of accounting for units and costs. A quantity schedule for the month of May for the first process follows:


Quantity Schedule

Equivalent Units


Materials

Conversion

Units accounted for as follows:




Transferred to the next process

175,000

175,000

175,000

Work in process, May 31 (materials 100% complete, conversion 30% complete)

10,000

10,000

3,000

Total units accounted for

185,000

185,000

178,000

 


Total Cost

Materials

Conversion

Cost to be accounted for:




Work in process, May 1

$5,500

$1,500

$4,000

Cost added by the department

406,000

54,000

352,000

Total cost to be accounted for

$411,500

$55,500

$356,000

Equivalent units


185,000

178,000

Required: Complete the cost reconciliation for the first process.

Question 4 - Sunspot Beverages, Ltd., of Fiji makes blended tropical fruit drinks in two stages. Fruit juices are extracted from fresh fruits and blended in the Blending Department. The blended juices are then bottled and packed for shipping in the Bottling Department. The following information pertains to the operations of the Blending Department for June. (The currency in Fiji is the Fijian dollar.)


Percent Completed


Units

Materials

Conversion

Work in process, beginning

20,000

100%

75%

Started into production

91,300



Completed and transferred out

96,831



Work in process, ending

14,469

100%

25%

Work in process, beginning


$25,200

$24,800

Cost added during June


$334,800

$238,700

Required: Prepare a production report for the Blending Department for June assuming that the company uses the weighted-average method.

Question 5 - You are employed by Spirit Company, a manufacturer of digital watches. The company's chief financial officer is trying to verify the accuracy of the ending work in process and finished goods inventories prior to closing the books for the year. You have been asked to assist in this verification. The year-end balances shown on Spirit Company's books are as follows:


Units

Costs

Work in process, December 31 (labor and overhead 50% complete)

215,000

$660,960

Finished goods, December 31

130,000

$1,009,800

Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each product at the rate of 60% of direct labor cost. There was no finished goods inventory at the beginning of the year. A review of Spirit Company's inventory and cost records has disclosed the following data:


Units

Materials

Labor

Work in process, January 1 (labor and overhead 80% complete)

200,000

$200,000

$315,000

Units started into production

646,000



Cost added during the year




Materials cost


$1,300,000


Labor cost



$1,895,000

Units completed during the year

631,000



The company uses the weighted-average cost method.

Requirement 1: Determine the equivalent units and costs per equivalent unit for materials, labor, and overhead for the year.

a. The equivalent units would be:

b. The costs per equivalent unit would be

Requirement 2: Determine the amount of cost that should be assigned to the ending Work in Process and Finished Goods inventories.

Requirement 3: Prepare the necessary correcting journal entry to adjust the Work in Process and Finished Goods inventories to the correct balances as of December 31.

Requirement 4: Determine the cost of goods sold for the year assuming there is no under- or overapplied overhead.

Solution Preview :

Prepared by a verified Expert
Accounting Basics: Required prepare a production report for the blending
Reference No:- TGS02581492

Now Priced at $30 (50% Discount)

Recommended (90%)

Rated (4.3/5)