oslo company produces large quantities of a standardized product. the following information is available for…

oslo company produces large quantities of a standardized product. the following information is available for the first production department for may. prepare a production cost report for this process using the weighted - average method. note: round \cost per eup\ to 2 decimal places.\n\ndirect materials conversion\npercent percent\nunits complete complete\nbeginning work in process inventory 6,000\nunits started this period 22,000\ncompleted and transferred out 21,000\nending work in process inventory 7,000 100% 25%\n\nbeginning work in process inventory\ndirect materials $4,785\nconversion 10,758 $15,543\ncosts added this period\ndirect materials 373,120\nconversion 462,992 836,112\ntotal costs to account for $851,655\n\noslo company—first department\nproduction cost report—weighted average method\nfor month ended may 31\nunit reconciliation:\nunits to account for:\ntotal units to account for\nunits accounted for:\ntotal units accounted for

oslo company produces large quantities of a standardized product. the following information is available for the first production department for may. prepare a production cost report for this process using the weighted - average method. note: round \cost per eup\ to 2 decimal places.\n\ndirect materials conversion\npercent percent\nunits complete complete\nbeginning work in process inventory 6,000\nunits started this period 22,000\ncompleted and transferred out 21,000\nending work in process inventory 7,000 100% 25%\n\nbeginning work in process inventory\ndirect materials $4,785\nconversion 10,758 $15,543\ncosts added this period\ndirect materials 373,120\nconversion 462,992 836,112\ntotal costs to account for $851,655\n\noslo company—first department\nproduction cost report—weighted average method\nfor month ended may 31\nunit reconciliation:\nunits to account for:\ntotal units to account for\nunits accounted for:\ntotal units accounted for

Answer

Explanation:

Step1: Calculate equivalent - units of production (EUP) for direct materials and conversion

For direct materials: Since direct materials are 100% complete in ending work - in - process, EUP for direct materials = Units completed and transferred out+Ending work - in - process units = 21000 + 7000=28000 units For conversion: EUP for conversion = Units completed and transferred out+(Ending work - in - process units×Percent complete for conversion) = 21000+(7000×0.25)=21000 + 1750 = 22750 units

Step2: Calculate cost per equivalent - unit (EUP) for direct materials and conversion

Cost per EUP for direct materials=$\frac{\text{Total direct materials cost}}{\text{EUP for direct materials}}$ Total direct materials cost = 4785+373120 = 377905 Cost per EUP for direct materials=$\frac{377905}{28000}\approx13.49$ Cost per EUP for conversion=$\frac{\text{Total conversion cost}}{\text{EUP for conversion}}$ Total conversion cost = 15543+836112 = 851655 Cost per EUP for conversion=$\frac{851655}{22750}\approx37.44$

Step3: Allocate costs to units completed and transferred out and ending work - in - process

Cost of units completed and transferred out: Direct materials cost = 21000×13.49 = 283290 Conversion cost = 21000×37.44 = 786240 Total cost of units completed and transferred out = 283290+786240 = 1069530 Cost of ending work - in - process: Direct materials cost = 7000×13.49 = 94430 Conversion cost = 1750×37.44 = 65520 Total cost of ending work - in - process = 94430+65520 = 159950

Step4: Prepare the production cost report

Direct Materials Conversion Total
Costs to account for:
Beginning work - in - process 4785 15543 20328
Costs added this period 373120 836112 1209232
Total costs to account for 377905 851655 1229560
Equivalent units of production (EUP) 28000 22750 -
Cost per equivalent - unit (EUP) 13.49 37.44 -
Costs accounted for:
Transferred out 283290 786240 1069530
Ending work - in - process 94430 65520 159950
Total costs accounted for 377905 851655 1229560

Answer:

The production cost report is shown above.