MANAGEMENT ACCOUNTING (MBA002)

Assignment 4

Exercise 1: Process costing

Selzik Company makes super-premium cake mixes that go through two processing departments, Blending and Packaging. The following activity was recorded in the Blending Department during July:

Production data:

		Total
Units in process, July 1 (materials 100% complete; conversion 30% complete)		10,000
Units started into Production		170,000
Units complete and transferred to Packaging		?
Units in process, July 31 (materials 100% complete; conversion 40% complete)		20,000
Cost data:
Work in process inventory, July 1:
Materials cost	$ 8,500
Conversion cost	4,900	$13,400
Cost added during the month:
Materials cost	$139,400
Conversion cost	244,200	383,600
Total Cost		$397,000

All materials are added at the beginning of work in the Blending Department.

Required:

Prepare a production report in weighted average method and FIFO method for the Blending Department for July. Use the following 3 steps as a guide in preparing your report:

Prepare a quantity schedule and compute the equivalents units

Compute the costs per equivalent unit for the month

Using the data from (1) and (2) above, prepare a cost reconciliation