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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Production Report, Weighted Average

Mino Inc. manufactures chocolate syrup in three departments: cooking, mixing, and bottling. Mino uses the weighted average method. The following are cost and production data for the cooking department for April (Note: Assume that units are measured in gallons.):

Chapter 6, Problem 49E, Production Report, Weighted Average Mino Inc. manufactures chocolate syrup in three departments:

Required:

Prepare a production report for the cooking department.

To determine

Make a production report of Company MI for the cooking department.

Explanation

Production Report:

The document comprises all the activities of process department related to manufacturing which occurs; in a particular period of time is called production report. It helps to identify the efficiency of process department.

Prepare production report of company MI as shown below:

Company MI
Cooking Department
Production Report for April Month
Weighted Average Method

Unit Information

Physical Flow:
Units to accounted for:Units(gallons)Units to accounted for:Units(gallons)
Units in beginning work in process20,000Units completed50,000
Units started40,000Units in ending work in process10,000
Total units to account for60,000Total units accounted for60,000
  
Equivalent Units 
Units completed50,000
Units in ending work in process2,000
Total equivalent units52,000
 
Cost Information
Costs to account for:(In $)
Cost of beginning work in process93,600
Cost incurred during the period314,600
Total costs to account for408,200
Cost per equivalent unit$7.85

Table (1)

Prepare the table to compute total cost as shown below:

Cost

Transferred Out

($)

Ending Work in Process($)

Total

($)

Costs accounted for:   
Goods transferred out392,500_392,500
Goods in ending work in process_15,70015,700
Total costs accounted for392,50015,700408,200

Table (2)

Therefore, the cost per equivalent unit is $7.85 and total cost accounted for is $408,200.

Working Notes:

1. Calculation of units started is given below:

Units started=Units started and completed+Units in EWIP=30,000 gallons+10,000 gallons=40,000 gallons

So, the units started are 40,000 gallons

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