Question

The Sanding Department of Sunland Furniture Company has the following production and manufacturing cost data for March 2022,

the first month of operation.
Production: 8,120 units completed and transferred out; 3,480 units in ending work in process are 100% complete as to materials and
20% complete as to conversion costs.
Manufacturing costs: Materials $37,120; labor $24,360; and overhead $41,760.
Prepare a production cost report.
(Round unit costs to 2 decimal places, e.g. 2.25 and other answers to O decimal places, e.g. 125.)

Answer 1

To prepare a production cost report, let's first calculate the total manufacturing costs:

Materials: $37,120
Labor: $24,360
Overhead: $41,760
Total Manufacturing Costs: $103,240

Now, calculate the cost per unit:

Total Manufacturing Costs / Total Units Produced = Cost per Unit
$103,240 / (8,120 units + 3,480 units) = $103,240 / 11,600 units = $8.90 per unit (rounded to 2 decimal places)

Now, let's distribute these costs:

For the 8,120 units completed and transferred out:
8,120 units * $8.90 = $72,268

For the 3,480 units in ending work in process, the materials are 100% complete, so we can assign the full cost per unit:
3,480 units * $8.90 = $30,972

However, these units are only 20% complete as to conversion costs (labor and overhead), so we'll calculate 20% of the cost per unit and assign this amount:
3,480 units * $8.90 * 20% = $6,194.40

Now, add up these amounts to get the total costs assigned:

$72,268 (for completed units) + $30,972 (for materials for ending work in process) + $6,194.40 (for conversion costs for ending work in process) = $109,434.40

This is the total cost assigned, which should be equal to the total manufacturing costs. The difference is due to rounding.