Units in beginning Work in Process (WIP) inventory 100,000 units Units started during the month (all direct materials, including cream and salt, are added at the beginning of the churning process) 1,500,000 units Units in ending Work in Process (WIP) inventory (40% of the way through the process) 200,000 units Cost information is as follows: WIP - Churning Department balance as of January 1: Direct material cost included in beginning WIP balance 110,000 Conversion cost included in beginning WIP balance 24,000 Beginning balance, WIP, January 1 $134,000 Manufacturing costs incurred during January: Direct materials used $1,730,000 Direct labor 10,000 Manufacturing overhead 558,000 Total manufacturing costs entered into production during January $2,298,000

Dairy produces an organic butter that is sold by the pound. The production of the butter begins in the Churning Department.

Data for the Churning Department for

January

follows:

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(Click

the icon to view the data from

January.)

Read the

requirements

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Question content area bottom

Part 1

Requirement 1. Prepare a production cost report for

January

for the Churning Department.

Prepare a production cost report for the Churning Department, one section at a time. (For entries with a $0 balance, make sure to enter "0" in the appropriate cell(s). Round cost per equivalent unit amounts to the nearest cent, $X.XX.)

Woodson Dairy Churning Department

Month Ended January 31

Production Cost Report

Flow of

Equivalent Units

Physical

Direct

Conversion

Flow of Production

Units

Materials

Costs

Units to account for:

Beginning work in process, January 1

Plus: Started in production during January

Total physical units to account for

Units accounted for:

Completed and transferred out

Plus: Ending work in process, January 31

Total physical units accounted for

Total equivalent units

Part 2

Direct

Conversion

Total Costs to Account for and Cost per Equivalent Unit

Materials

Costs

Beginning work in process

Plus: Costs added during January

Total costs to account for

Divided by: Total equivalent units

Cost per equivalent unit

Part 3

Direct

Conversion

Assignment of total costs:

Materials

Costs

Total

Completed and transferred out:

Equivalent units completed and transferred out

Multiplied by: Cost per equivalent unit

Costs assigned to units completed and transferred out

Part 4

Ending work in process:

Equivalent units in beginning work in process, January 1

Multiplied by: Cost per equivalent unit

Costs assigned to units in ending work in process, January 31

Total costs accounted for

Part 5

Requirement 2. How much did it cost to make one pound of butter in the Churning Department? (Round all amounts to the nearest cent, $X.XX.)

Direct material cost
Conversion cost
Total cost

Part 6

Requirement 3. How much did it cost to make a partially completed pound of butter in the Churning Department? Does this make sense? Why or why not?

How much did it cost to make a partially completed pound of butter in the Churning Department? (Round all amounts to the nearest cent, $X.XX.)

Direct material cost
Conversion cost
Total cost

Part 7

Does this make sense? Why or why not?

No, this does not make sense

because

% of the

have not yet been added.