NanoTech Pte Ltd produces Product X through two departments: Department A and Department B. All direct materials
Question:
NanoTech Pte Ltd produces Product X through two departments: Department A and Department B. All direct materials are introduced at the start of the process. Conversion costs are incurred uniformly throughout the process. The following information pertains to Department A for June 20X9:
Work in process, 1st June Units
(100% complete, materials; 70% complete, labour and overhead)............10000
Started during June.................................................................160,000
Work in process, 30th June Units
(100% complete, materials; 30% complete, labour and overhead).............18000
The costs of Department A work in process at 1st June were as follows:
Work in process, 1st June
Materials............................$102,000
Direct labour...........................69,000
Overhead..............................45,000
Total.................................$216,000
The costs added by Department A during June were as follows:
Materials...........................$2,040,000
Direct labour...........................888,650
Overhead................................540,000
Total costs added.................$3,460,650
Required:
a) Prepare a production report for Department A for June using the weighted average method. The report should disclose the physical flow of units, equivalent units, unit costs as well as the costs transferred out.
b) What are the possible pros and cons of weighted-average versus FIFO processing costing?
Step by Step Answer:
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta