Problem Solving

Requirement 1: Cost of production report

Southern Aggregate Company
Cost of Production Report - Mixing Department
For the Month Ended May 31

Equivalent Units
Units Whole Units Direct Materials Conversion
Units charged to the production:
Inventory in process, May 1 2,000
Received from Baking 15,000
Total Units accounted for by
The Mixing Department 17,200

Units to be assigned costs:

Inventory in process, May 1(25%) 2,000 - 1,500
Started and Completed in May 14,000 14,000 14,000
Transferred to finished goods in May 16,000 14,000 15,500
Inventory in process, May 31 (50%) 1,200 1,200 600
Total units to be assigned costs 17,200 15,200 16,100

Cost Direct Materials Conversion Total

Costs per equivalent unit:
Total costs for May in Mixing Department $98,800 $28,980
Total equivalent units / 15,200 / 16,100
Cost per equivalent unit $6.50 $1.80

Cost assigned to production:

Inventory in process, May 1 $13,700
Costs incurred in May 127,780
Total costs accounted for by the Mixing Department $141,480
Costs allocated to completed and partially completed units:
Inventory in process, May 1 - balance $13,700
To complete inventory in process, May 1 - $2,700 2,700
Costs of completed May 1 work in process $16,400
Started and completed in May 91,000 25,200 116,200
Transferred to finished goods in May $132,600
Inventory in process, May 31 7,800 1,080 8,880
Total costs assigned by the Mixing Department $141,480

Supporting computation:
1,500 x 1.80 = 2,700
14,000 x 6.50 = 91,000
14,000 x 1.80 = 25,200
1,200 x 6.50 = 7,800
600 x 1.80 = 1,080

Requirement 2: Cost of goods sold

1,800 units at $8.00 $14,400
2,000 units at $8.20 16,400
12,000 units at $8.30 99,600
15,800 units $130,400

Supporting computation:
(13,700 + 2,700) / 2,000 = $8.20
116,200 / 14,000 = $8.30

Requirement 3: Finished goods inventory, May 31, 2014

2,000 units at $8.30 = $16,600