Anzio Co. manufactures a wooden recycling container in its Forming Department. Direct materials for this product are introduced at the beginning of the production cycle. At the start of production, all direct materials required to make one output unit are bundled in a single kit. Conversion costs are added evenly during the cycle. Some units of this product are spoiled as a result defects only detectable at inspection of finished units. Normally spoiled units are 10% of the goods output.

Summary of data for July 2004 are:

Physical Units for July 2004

Work in Process, beginning inventory (July 1) 1,500 units

Direct Materials (100% complete)

Conversion costs (60% complete)

Started during July 8,500 units

Completed and transferred out during July 7,000 good units

Work in Process, ending inventory (July 31) 2,000 units

Direct Materials (100% complete)

Conversion costs (50% complete)

Total Costs for July 2004

Assignment for Cost and Management Accounting I

Admas University Page | 4

Work in process, beginning inventory

Direct materials (1,500 equivalent units * Br. 8) Br. 12,000

Conversion costs (900 equivalent units * Br.10) 9,000 Br. 21,000

Direct materials costs added during July 76,500

Conversion costs added during July 89,100

Total costs to account for Br.186, 600

Required: 

Prepared the cost of production report using FIFO and weighted average Method and record the necessary entry.

Answer rating: 100% (QA)

Chysteal sireet Materials to Conversion Coste Beginning Inventory 1500 Started 8500 Units to be a... View the full answer