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Work in process, May 1: 200 unitsMaterials: 50% complete. $ 3,000Conversion: 30% complete. 1,000
Units started into production in May: 5,000Units completed and transferred out in May: 4,800
Costs added to production in MayMaterials cost $ 74,000Conversion cost 70,000
Work in process, May 31: 400 unitsMaterials 40% complete.Conversion 25% complete.
Cost
Production Report Example
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Section 1: Quantity Schedule with Equivalent Units
Production Report Example
Units to be accounted for:
W ork in process, May1 111 Sta rted into production .1111 Tota l units .1111
Equiva lent unitsM ate ria ls Conve rsio
Units accounted for a s follow s:From be genning, Ma y1 111 111 111
( x %) --m a te ria ls1 1 11 1( x %) -- conversion1 1 11 1
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Section 1: Quantity Schedule with Equivalent Units
Production Report Example
Units to be accounted for:Work in process, May1 111
Sta rted into production .1111
Tota l units .1111
Equivalent unitsM a te ria ls Conve rsio
Units accounted for as follows:Beginning, May1 111 111 111 Com ple te d a nd tra nsfe rre d . 1 111 .1111 .1111
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Production Report Example
Section 1: Quantity Schedule with Equivalent UnitsUnits to be accounted for:
Work in process, May 1 111 Started into production . 1111
Total units . 1111
Equivalent unitsMaterials Conversion
Units accounted for as follows:Beginning, May 1 111 111 111 Completed and transferred . 1 111 .1111 .1111 Work in process, May 11 111
Materials % complete11 111 .1111 .1 111
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Production Report ExampleSection 1: Quantity Schedule with Equivalent Units
Units to be accounted for:Work in process, May 1 111 Started into production . 1111 Total units . 1111
Equivalent unitsMateria ls Conversion
Units accounted for as follows:Beginning, May 1 111 111 111
Completed and transferred .1 111
.1111 .1111 Work in process, May 11 111 Materia ls % complete11 111 Conversion % complete11 111
.1111 .1 111 .1111
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Section 2: Compute cost per equivalent unit
Production Report Example`
TotalCost Materials Conversion
Cost to be accounted for:Work in process, May 1 .1111$Costs added in the Shipping
and Milling Department .111111 .11111 .11111 Total cost .111 111$ .11111$ .11111$
Equivalent units . 1 111 .1111
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Production Report Example
Section 2: Compute cost per equivalent unitCost to be accounted for:
Work in process, May 1 .1111$Costs added in the Shipping
and Milling Department .111111 .11111 .11111 Total cost .111111$ .11111$ .11111$
Equivalent units . 1111 .1111 Cost per equivalent unit , 11 111$
$74,000 4,860 units = $15.226 (rounded)
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TotalCost Materials Conversion
Cost to be accounted for:
Work in process, May 1 .1111$Costs added in the Shipping
and Milling Department .111111 .11111 .11111 Total cost .111 111$ .11111$ .11111$
Equivalent units .1 111
.1111 Cost per equivalent unit , 11 111$ ,11 111$Total cost per equivalent unit = $ . + $ . = $ ,1 11 1 1 1 11 1 1 1 11 1 1
Production Report Example
$70,000 4,840 units = $14.463 (rounded)
Section 2: Compute cost per equivalent unit
Production Report Example
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Section 3: Cost ReconciliationProduction Report Example
Total Equivalent UnitsCost Materials Conversion
Cost accounted for as follow s:Transfer to next depertemen:
From beginning inventrory:Cost in beginning inventory .1111 Cost to complete these unit:Material, at $ . per EU1 11 1 1 .1 111 111Conversion, at $ , per EU1 11 1 1 .1111 11
Total cost .1111
$Unit started and completedthis month, at $ , per E1 11 1 1 .111111 .1111 .1111 Total cost transfeered .111111$
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Total Equivalent UnitsCost Materials Conversion
Cost accounted for as follows:Transferred out during May $ . 111 111 .1 111 .1111 Work in process, May : 11
Materials 111 Conversion 111
Total work in process, May 11
Total cost accounted for
Production Report Example
Section 3: Cost Reconciliation
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Total Equivalent UnitsCost Materials Conversion
Cost accounted for as follows:Transferred out during May . 111 111$ .1111 .1111 Work in process, May : 11
Materials, at $ , 1 11 1 1 .1111 111 Conversion, at $ , 11111 .1111 111
Total work in process, May 11 .1111 Total cost accounted for $ . 111 111
160 units @ $15.226
Production Report Example
Section 3: Cost Reconciliation
100 units @ $14,463
All costsaccounted for
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Operation Costing
Operation costing employs some aspectsof both job-order and process costing.
Conversion costsassigned to batches
as in process costing.
Conversion costsassigned to batches
as in process costing.
Material Costs Chargedto batches as in
job-order costing.
Material Costs Chargedto batches as in
job-order costing.
Job-order Costing ProcessCostingOperation Costing(Products produced in batches)
Comparison of Equivalent units
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E q u i v a l e n t U n i t
M a te r ia l sC o n v e r siE q u iv a l e n t u n i ts-w e ig h t-a v e r a g e m e th o d .1 111 .1 111 L e ss e q u iv a l e n t u n i t i n b e g i n n i n g i n v e n to r y
u n i ts x %1 1 1 1 1 111
u n i ts x %1 1 1 1 1 11 E q u iv a le n t u n i ts o f p r o d u c t i o n -F I F O m e th o d.1 111 .1 111
Comparison of Equivalent unitsUnder theWeight-average and
FIFO method