Process Costing Homework

PROCESS COSTING PROBLEM

Spectre Chemicals produces Zaloff in;r two department process. lnformation on the two departments for March and April, 20lL are as follows:

March 2011:

Department 1: The company had be,;;inning inventory of 6,000 units,40% completed with a cost of 545,000. During the month, the department transferred in 22,OOO units of the direct materials with a cost of 510 per unit. Ending inventory was 7,000 units, 30% completed. Direct labor is 5310,500 and factory rrverhead is S103,500.

Department 2: The company had betilinning inventory of 5,000 units, 70% completed with a cost of 580,000. During the month, c irect labor was $175,000 and factory overhead was 587,500. Ending inventory was 10,0C,3 units, 50% completed.

April 2011:

Department L: During the month, tlre department transferred in 20,000 units of the direct materials with a cost of $11 per unit. tlirect labor is 5209,000 and factory overhead is 5104,500. Ending inventory is 10,000 units 50% completed.

Department 2: During the month, de irartment 2 transferred in 17,000 units from Department 1. All production was corrrpleted in April; therefore, there is no ending

inventory for April. Direct labor is S17.;,000 and factory overhead is 587,500 (Same as March

2011).

Requirrad:

r, Compute the Equivalent Units of Producti,:ln, Material costs, and Conversion costs for each department for March and April, 201L.

r Complete the attached chart - one for ea<:h department and each month e Prepare a cost of production report for Mirrch and April 20L1.

LAYERS ACTUAL

UNITS MATERIALS CONVERSION

COSTS TOTAL COST

BEGINNING INVENTORY

ENDING INVENTORY

STARTED & COMPLETED

PROCESS COSTI NG WORKSHEET

LAYERS ACTUAL

UNITS % EUP MATERIALS CONVERSION

COSTS TOTAL COST

BEGINNING INVENTORY

STARTED & COMPLETED

ENDING iNVENTORY

Direct materials

Direct labor Factory overhead

PROCESS COSTI NG WORKSHEET