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1 May, 01:16

The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2020, the first month of operation. Production: 6,240 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs. Manufacturing costs: Materials $36,960; labor $21,400; overhead $30,242. Prepare a production cost report. (Round unit costs to 2 decimal places, e. g. 2.25 and other answers to 0 decimal places, e. g. 125.)

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  1. 1 May, 02:44
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    Cost of goods transferred out $71,061.012

    Value of closing inventory = $17,540.98

    Explanation:

    Cost per equivalent unit = Cost / total equivalent unit

    Material

    Equivalent unit = (100%*6,240) + (100% * 3,000) = 9240

    Cost per equivalent unit = $36,960/9,240 units = 4

    Labour

    Equivalent unit = (100%*6,240) + (25% * 3,000) = 6990 units

    Cost per equivalent unit = (21,400 + 30,242) / 6990 = 7.387982833

    Cost of goods transferred out = (6,240 * 4) + (7.38*6,240) = 71,061.012

    Value of closing inventory = (3,000 * 4) + (7.38 * 25%*3000) = 17,540.98

    Cost of goods transferred out $71,061.012

    Value of closing inventory = $17,540.98
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