Process Costing in Production: Cost Analysis and Reporting

School: Rutgers University - Course: 010 COST ACCOU - Subject: Accounting

Process Costing 1. The Blending Department for CenTex Paints started October with 1,000 gallons in process and started in production 9,500 gallons. During the month, 7,000 gallons were completed and transferred to the next department. Ending work-in-process was 3,500 gallons (100% complete with respect to direct materials and 30% complete for conversion costs). The department uses the weighted-average method. Prepare a production cost report for the Blending Department for the month of October. Production Cost Report - Blending Department Month Ended Equivalent Units Physical DirectConversion UNITSUnitsMaterials Costs Units to account for: Beginning WIP Inventory1,000 Started in production9,500 Total units to account for10,500 Units accounted for: Completed and transferred out7,0007,0007,000 Ending WIP Inventory-30%3,5003,5001,050 Total units accounted for10,50010,5008,050 DMConversion So equivalent units10,5008,050 Costs Beginning WIP$ 500$ 1,210 Cost added during the period$ 5,800$ 5,230

Total cost to account for$ 6,300$ 6,440A Divide by Eq Units105008050B Cost per EU$ 0.60$ 0.80C = A/B Transferred cost Material7000$ 0.60$ 4,200.00 Conversion7000$ 0.80$ 5,600.00 $ 9,800.00 Ending WIP Material3500$ 0.60$ 2,100.00 Conversion1050$ 0.80$ 840.00 $ 2,940.00 $ 12,740.00 2. The Finishing Department started the month with 500 units in process, received 2,000 units from the Assembly Department, and transferred 2,100 units to the finished goods storage area. All direct materials are added at the beginning of the process. The units in process at the end of the month are 45% complete with respect to conversion costs. The department uses the weighted-average method. The Finishing Department incurred the following costs: