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Part b process costing Intrepid industries manufactures sterile parts used in medical equipment. The company uses...

Part b process costing

Intrepid industries manufactures sterile parts used in medical equipment. The company uses the weighted-average process costing method to account for production costs. It produces parts in three different departments: Forming, Sterilization, and Assembling. The following information was reported for the assembling department for the month of June:

amount

Degree of completion

Prior department costs transferred in from the forming

$387,600

100%

Costs added by the sterilization department:

Direct materials

$317.200

100%

Direct labor

$120,050

40%

Manufacturing overhead

$67100

30%

$504350

Wip June 1

$891950

During June, 580000 units were transferred in from the forming department at a cost of $1,870,000. The Assembling Dept added the following costs:

Direct materials

$974800

Direct labor

$318600

Manufacturing overhead

$202000

Total costs added

$1,495,4000

Assembling finished 480000 units and transferred them to the sterilization dept. At June 30 225000 units were still in wip inventory. The degree of completion of WIP inventory at June 30 was as indicated below:

Direct materials

80%

Direct labor

65%

Manufacturing overhead

30%

A. Prepare a correctly formatted (including heading) production cost report using the weighted average method.

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Answer #1

A. Production Report using the weighted average method :

Physical units Transferred units Direct Mat. Direct Labor Manuf. o/h Total
O WIP (on weighted average method) 125000 125000 125000 125000 125000
units started and completed 355000 355000 355000 355000 355000
transferred to Sterlisation deptt. 480000
C WIP 225000 225000 180000 146250 67500
Equivalent Units 705000 660000 626250 547500
Total costs:
Opening WIP 387600 317200 120050 67100
During June 1870000 974800 318600 202000
Total Costs = 2257600 1292000 438650 269100
Cost per Eq. unit $3.20 1.96 0.70 0.49
Cost of Transferred Units 480000 * 6.35 $3048000
Cost of C WIP 720000 352800 102375 33075 $1208250
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