The Welding Department of Healthy Company has the following production and manufacturing cost data for February 2020. All materials are added at the beginning of the process. Manufacturing Costs Production Data Beginning work in process Beginning work in process 15,300 units, 1/10 complete Materials $18,000 Units transferred out 54,900 Conversion costs 14,760 $32,760 Units started 50,600 Materials 215,945 Ending work in process 11,000 units, 1/5 complete Labor 67,500 Overhead 83,330 Prepare a production cost report for the Welding Department for the month of February.

Solution:

                            MANUFACTURING COMPANY

                                    Welding Department

                                   Production Cost Report

                    For the Month Ended February 28, 2020

                                                                               Equivalent Units

Quantities                                 Physical      Materials       Conversion

                                                 Units                                     Costs  

Units to be accounted for

Work in process, February 1    15,300

Started into production            50,600

Total units                                 65,900

Units accounted for

Transferred out                        54,900          54,900         54,900

Work in process, February 28  11000           11000             2200

Total units                                  65,900         65,900         65,900

Costs                             Materials      Conversion Costs      Total

Unit costs

Total Costs                   $233945          $128000              $326000

Equivalent units            60000              51200

Unit costs                         $3.3                 $2.5                     $5.8

Costs to be accounted for

Work in process, February 1                                                $32,175

Started into production                                                        293825

Total costs                                                                           $326000

Cost Reconciliation Schedule

Costs accounted for Transferred out                                 $284200

Work in process, February 28

Materials                                                   $36300

Conversion costs                                      5500                  41800

Total costs                                                                          $326000