Mirror Products manufactures mirrors and uses a standard process costing system. The following production and cost data
Question:
Mirror Products manufactures mirrors and uses a standard process costing system.
The following production and cost data are based on June 2022. This information represents the standard cost of one unit:
Direct material | 6.50SAR |
Conversion | 12.50SAR |
Total manufacturing cost | 19.00SAR |
Beginning WIP | 20,000 units (100% DM; 80% conversion) |
Started in June | 180,000 units |
Completed in June | 140,000 units |
Ending WIP | (100%DM 60% conversion) |
Actual costs for June: | |
Direct material | 1,500,000SAR |
Conversion | 2,000,000SAR |
Total actual cost | 3,500,000SAR |
1. Prepare an equivalent unit of the production schedule.
2. Prepare a cost of production report and assign costs to goods transferred and to inventory.
3. Compute the direct material variance and conversion cost variance. Show all work. What is the total amount to be booked against the cost of goods sold?
4. Based on your analysis above, does this product appear to be a good source of income for the firm? Should it continue operations? Why or why not?
Expert Answer:
Direct Material cost per unit 650 SAR Conversion cost 1250 Sar Total Cost 1900 SAR 1 Equivalent unit of production schedule for the month of June 2022 Beginning WIP 20000 Units Started in June 180000 ... View the full answer
