The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2017, the first month of operation. Production: 6,480 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 $30,052; labor $20,600; overhead $36,536. Prepare a production cost report.

Explanation:

Opening                          0

Started                         6480

Transferred                 -3000

Closing                        3480

We will draw cost table to identify the average cost incurred on complete units and closing cost of closing units.

                                               Cost Table        

        A              B             C=A+B              D               E        F=D+E G=C/F  

Cost          Op.     Current  Total Cost   Complete  Closing   Equvlnt    Cost  

element    cost       cost                            units          WIP       Pro.units   P.U

Material   -     30,052   30,052      3,000        3,480    6,480      4.64

Labour Cost   -     20,600   20,600      3,000         696      3,696       5.57  

VOH         -     36,536   36,536      3,000          696     3,696       9.89  

                                                                                                                    20.1

Cost Account For    

Complete  3,000   20.10   60,290  

Closing Wip    

Material  3,480   4.64   16,139  

Labour  696   5.57   3,879  

VOH   696   9.89   6,880  

                           26,898  

Total Cost            87,188  

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