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26 June, 20:20

The Welding Department of Healthy Company has the following production and manufacturing cost data for February 2017. All materials are added at the beginning of the process.

Manufacturing Costs

Beginning work in process

Materials $17,600

Conversion costs 15,060 $22,660

Materials 199,834

Labor 67,400

Overhead 49,238

Production Data

Beginning work in process 14,500 units, 1/10 complete

Units transferred out 55,300

Units started 50,600

Ending work in process 9,800 units, 1/5 complete

1. Prepare a production cost report for the Welding Department for the month of February. (Round unit costs to 2 decimal places, e. g. 2.25 and all other answers to 0 decimal places, e. g. 1,225.)

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  1. 26 June, 20:30
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    Answer and Explanation:

    The Preparation of production cost report for the Welding Department for the month of February is shown below:-

    Healthy Company

    Welding Department

    Production cost report

    For the month of Feb

    Equivalent units

    Quantities Physical units Materials Conversion costs

    Units to be accounted for

    Work in progress 1 Feb 14,500

    Started into production 50,600

    Total units 65,100

    Units accounted for

    Transferred out 55,300 55,300 55,300

    Work in progress

    28 Feb 9,800 9,800 1,960

    (9,800 * 1 : 5)

    Total units 65,100 65,100 57,260

    Costs Material costs Conversion costs Total

    Total cost 282,534 188,958 471,492

    Equivalent cost 65,100 57,260 122,360

    Unit costs 4.34 3.3 3.86

    Cost to be accounted for

    Work in progress Feb 1 32,660

    (17,600 + 15,060)

    Started into production 316,472

    (199,834 + 67,400 + 49,238)

    Total costs 349,132

    Working note:-

    For Material cost = (17,600 + 199,834 + 65,100)

    For Conversion cost = (15,060 + 67,400 + 49,238 + 57,260)

    Cost reconciliation schedule

    Cost accounted for

    Transferred out 213,458

    (55,300 * 3.86)

    Work in progress Feb 28

    Material 42,532

    (9,800 * 4.34)

    Conversion 6,468 49,000

    (1,960 * 3.3)

    Total cost 262,458
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