6.Suppose that Peace Corporation, chemical manufacturing Company, has two production departmentsusing sequential production flow: the Mixing Department and the Bottling Department. In theMixing Department direct material consisting ingredient chemicals is added at the beginning of theproduction process. Direct labor and manufacturing overhead costs are incurred evenly throughout theproduction process. Predetermined overhead rate is used in the mixing department using direct laborcost as a cost allocation base and at 125% overheads per $1 direct labor cost. The following tablepresents the summary activity performed in Mixing Department during March. The direct material and conversion costs listed under beginning work in process section represent the work done during February.Work in process, March 1:20,000 Units Direct material, 100% Complete, cost of*$50,000 Conversion costs, 10% Complete, cost of*7,200Balance in work in process, March 1*$57,200 Units started in March30,000 UnitsUnits completed during March and transferred out of the Mixing department40,000 UnitsWork in process, March 31:10,000 UnitsDirect material, 100% CompleteConversion costs, 50% CompleteCosts incurred During March:Direct material$90,000 Conversion costs:Direct labor$86,000 Applied Manufacturing Overhead**107,500Total Conversion Costs$193,500 *These costs were incurred during the month of February **Overhead is allocated at 125% of Direct Labor cost Required: prepare the cost production report based on FIFO and Weighted Average method and recordthe necessary Entries.
6.
Suppose that Peace Corporation, chemical manufacturing Company, has two production departments
using sequential production flow: the Mixing Department and the Bottling Department. In the
Mixing Department direct material consisting ingredient chemicals is added at the beginning of the
production process. Direct labor and
production process. Predetermined overhead rate is used in the mixing department using direct labor
cost as a cost allocation base and at 125%
presents the summary activity performed in Mixing Department during March. The direct material
and conversion costs listed under beginning work in process section represent the work done during February
.
Work in process, March 1:
20,000 Units
Direct material, 100% Complete, cost of*
$50,000
Conversion costs, 10% Complete, cost of*
7,200
Balance in work in process, March 1*
$57,200
Units started in March
30,000 Units
Units completed during March and transferred out of the Mixing department
40,000 Units
Work in process, March 31:
10,000 Units
Direct material, 100% Complete
Conversion costs, 50% Complete
Costs incurred During March:
Direct material
$90,000
Conversion costs:
Direct labor
$86,000
Applied Manufacturing Overhead**
107,500
Total Conversion Costs
$193,500
*These costs were incurred during the month of February
**Overhead is allocated at 125% of Direct Labor cost
Required: prepare the cost production report based on FIFO and Weighted Average method and record
the necessary Entries.
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