Question

The Laramie Factory produces expensive boots. It has two departments that process all the items. During January, the beginning work in process in the tanning department was 40% complete as to conversion and 100% complete as to direct materials. The beginning inventory included $6,000 for materials and $18,000 for conversion costs. Ending work-in-process inventory in the tanning department was 40% complete. Direct materials are added at the beginning of the process. Beginning work in process in the finishing department was 60% complete as to conversion. Beginning inventories included $7,000 for transferred-in costs and $10,000 for conversion costs. Ending inventory was 30% complete. Additional information about the two departments follows: Tanning Finishing Beginning work-in-process units 5,000 4,000 Units started this period 14,000 ? Units transferred this period 16,000 18,000 Ending work-in-process units ? 2,000 Material costs added $18,000 ? Conversion costs 32,000 $19,000 Transferred-out cost 50,000 ?

Required: Prepare a production cost worksheet using weighted-average costing for the finishing department.

Answer 1

The Laramie Factory

Finishing Department

Production Cost Worksheet, using weighted-average costing

Cost assigned to: Materials Conversion Total

Units transferred out $66,348 $28,062 $94,410

Ending work in process 7,372 935 8,307

Total cost accounted for $73,720 $28,997 $102,717

Step-by-step explanation:

a) Data and Calculations:

Materials Conversion

Tanning Finishing Tanning Finishing

Beginning work in process 100% 100% 40% 60%

Cost of beginning WIP $6,000 $7,000 $18,000 $10,000

Ending work in process 100% 100% 40% 30%

Additional information:

Tanning Finishing

Beginning work-in-process units 5,000 4,000

Units started this period 14,000 16,000

Units transferred out this period 16,000 18,000

Ending work-in-process units 3,000 2,000

Materials Conversion

Tanning Finishing Tanning Finishing

Beginning work in process 100% 100% 40% 60%

Beginning work in process done this period 60% 40%

Ending work in process 100% 100% 40% 30%

Cost of beginning WIP $6,000 $7,000 $18,000 $10,000

Costs added 18,000 $66,720 32,000 19,000

Total costs of production $24,000 $73,720 $50,000 $29,000

Transferred-out cost

Equivalent units

Materials Conversion

Tanning Finishing Tanning Finishing

Units started and completed 16,000 18,000 16,000 18,000

Ending work-in-process units 3,000 2,000 1,200 600

Equivalent units of production 19,000 20,000 17,200 18,600

Cost per equivalent units Materials Conversion

Tanning Finishing Tanning Finishing

Total cost of production $24,000 $73,720 $50,000 $29,000

Equivalent units of production 19,000 20,000 17,200 18,600

Cost per equivalent unit $1.263 $3.686 $2.907 $1.559

Tanning Department

Cost assigned to: Materials Conversion Total

Units transferred out $20,208 $46,512 $66,720

Ending work in process 3,789 3,488 7,277

Total costs $23,997 $50,000 $73,997

Finishing Department

Cost assigned to: Materials Conversion Total

Units transferred out $66,348 $28,062 $94,410

Ending work in process 7,372 935 8,307

Total cost accounted for $73,720 $28,997 $102,717