Question

The Assembly Department of Nitz Company has the following production and cost data at the end of May, 2020. Production: 30,000 units started into production; 25,000 units transferred out and 5,000 units 100% completed as to materials and 40% completed as to conversion costs. Manufacturing Costs: Materials added at beginning of process, $90,000; labor, $75,000; overhead $60,000.Prepare a production cost report for the month of May.

Answer 1

Step-by-step explanation:

The objective of this question is to prepare a production cost report for the month of May for Nitz Company.

Nitz Company

Assembly Department Production Cost Report

For The Month Ended May, 2020

Equivalent Units

Quantities Physical units Materials Conversion costs

Units to be

accounted for 0

Work in process,

May 1

Started into 30000

Production

Total Units 30000

Units Accounted for:

Transferred out 25000 25000 25000

Work in process,

May 31 5000 5000 2000

Total Units

Accounted for 30000 30000 27000

Costs Material Conversion Total

Costs

Unit Costs

Costs in May 90,000 135,000 225,000

Equivalent Units 30000 27000

Unit Costs 3 5 8

Costs to be accounted for:

Work in Process, May 1 -

Started into Production 225,000

Total Costs 225,000

Cost Reconciliation Statement:

Transferred out 200,000

Work in Process, May 31: 0

Materials 15000

Conversion Costs 10,000 25,000

Total Costs 225,000

NOTE:

The process by which we determine the Conversion Costs is by the relation:

Conversion Costs which is = Labor + Overhead

Conversion Costs = 75000 + 60000

Conversion Costs = $135000

And for the Total Costs ; we have:

Total Costs = Material + Conversion Costs

Total Costs = 90000 + 135000

Total Costs = $225000

Work in Process, May 31 = 225,000-225,000 = 0