Cost of Production Report (CPR):
Definition and Explanation of Cost of Production Report
(CPR):
A departmental cost of production report (CPR) shows all costs chargeable to a
department. It is not only the source for summary journal entries at the end of the month
but also a most convenient vehicle for presenting and disposing of costs accumulated during
the month. A cost of production report shows:
1. Total unit costs transferred to it from a preceding department.
2. Materials, labor, and factory overhead added by the department.
3. Unit cost added by the department.
4. Total and unit costs accumulated to the end of operations in the department.
5. The cost of the beginning and ending work in process inventories.
6. Cost transferred to a succeeding department or to a finished goods storeroom.
It is customary to divide the cost section of the report into two parts: one showing costs for
which the department is accountable, including departmental and cumulative total and unit
costs, the other showing the disposition of these costs. A quantity schedule showing the
total number of units for which a department is accountable and the disposition made of
these units is also part of each department's cost of production report. Information in this
schedule, adjusted for equivalent production is used to determine the unit costs added by a
department, the costing of the ending work in process inventory, and the cost to be
transferred out of the department.
A cost of production report determines periodic total and unit costs. However, a report that
would merely summarize the total costs of materials, labor, and factory overhead and
shows only the unit cost for the period would not be satisfactory for controlling costs. Total
figures mean very little; cost control requires detailed data. Therefore, in most instances,
the total cost is broken down by cost elements for each department head responsible for the
costs incurred. Furthermore, detailed departmental figures are needed because of the
various completion stages of the work in process inventories.
Either in the cost of production report itself or in the supporting schedules, each item of
material used by a department is listed; every labor operation is shown separately; factory
overhead components are noted individually; and a unit cost is derived for each item. To
condense the illustrated cost of production reports, only total materials, labor, and factory
overhead charged to departments are considered; and unit costs are computed only for
each cost element rather than for each item.
Cost of Production Report - Blending
Department (1st Department):
Learning Objective:
1. Prepare a cost of production report of first department in a process costing system.
2. How equivalent units are calculated in a process costing system?
3. How the lost units are treated in the cost of production report of first department?
The cost of production report of the Blending Department, the originating department of The
Clonex Corporation, is shown below. It illustrates the detailed computations needed
to complete a cost of production report.
The Clonex Corporation
Blending Department (1st Dept.)
Cost of Production Report
For the Month of January, 19
Quantity Schedule:
Units started in process
50,000
======
Units transferred to next department
Units still in process (all materials - 1/2 labor and FOH)
45,000
4,000
Units lost in process
1,000
------Total
Cost
50,000
======
unit
Cost
$24,500
29,140
28,200
------$81,840
======
$0.50
0.62
0.60
----$1.72
====
Cost Charged To the Department:
Cost added by the department:
Materials
Labor
Factory Overhead (FOH)
Total cost to be accounted for
Cost Accounted for as Follows:
Transferred to next department (45,000 × $1.72)
Work in process - ending inventory:
Materials (4,000 × $0.50)
Labor (4,000 × 1/2 × $0.60)
Factory Overhead (4,000 × 1/2 × $0.60)
Total cost accounted for
$77,400
$2,000
1,240
1,200
------
4,440
-----$81,840
=====
Additional Computations
Equivalent Production:
Materials = 45,000 + 4,000 = 49,000 units
Labor and factory overhead = 45,000 + 4,000 / 2 = 47,000 units
Unit Costs:
Materials = $24,500 / 49,000 = $0.50 per unit
Labor = $29,140 / 47,000 = $0.62 per unit
Factory overhead = $28,200 / 47,000 = 0.60 per unit
Explanation:
The quantity schedule of the cost report shows that Blending Department put 50,000
units in process, with units reported in terms of finished product. Finished units could be
stated in pounds, feet, gallons, barrels, etc. If materials issued to a department are stated
in pounds and finished product is reported in gallons, units in the quantity schedule will be
in terms of the finished product, gallons. A product conversion table would be used to
determine the number of units for which the department is accountable. The quantity
schedule of the Blending Department's report shows that of the 50,000 units for which the
department was responsible, 45,000 units were transferred to the next department (Testing
Department - second department), 4,000 units are still in process, and 1,000 units were
lost in processing.
Equivalent Production:
Costs charged to a department come from an analysis of materials used, payroll
distribution sheets, and department expense analysis sheets. The Blending Department's
unit cost amounts to $1.72 ( $0.50 for materials, $0.62 for labor, and $0.60 for factory
overhead).
Calculations of individual unit costs requires an analysis of the ending work in process to
determine its stage of completion. This analysis is usually made by a supervisor or is the
result of using predetermined formula. Materials, labor, and factory overhead have been
used on the 4,000 units in the process but not in an amount sufficient for completion. To
assign costs equitably to in process inventory and transferred units, units still in process
must be restated in terms of completed units, which is 4,000 units for materials cost but
less than 4,000 for labor and overhead costs. The figure for partially completed units in
process is added to units actually completed in order to arrive at the equivalent production
figure for the period. This equivalent production figure represents the number of units for
which sufficient materials, labor, and overhead were issued or used during a
period. Materials, labor and overhead costs are divided by the appropriate equivalent
production figure to compute unit costs by elements. Should a cost element be at a different
stage of completion with respect to units in process, then a separate equivalent production
figure must be computed.
In many manufacturing processes, all materials are issued at the start of production. Unless
stated otherwise, the illustrations in this discussion assume such a procedure. Therefore,
the 4,000 units still in process have all the materials needed for their completion but not all
labor and factory overhead (FOH). Only 50% of the labor and factory overhead needed
to complete the units has been used. In terms of equivalent production, labor and factory
overhead in process are sufficient to complete 2,000 units.
Units Costs:
Departmental cost of production reports indicate the cost of units as they leave department.
These individual departmental units costs are accumulated into a completed unit cost for the
period. The report for the Blending Department shows a materials cost of $24,500, labor
cost of $29,140, and factory overhead of $28,200. The materials cost of $24,500 is
sufficient tocomplete 49,000 units (the 45,000 units transferred out of the department as
well as the work in process for which enough materials are in process to complete 4,000
units). The unit materialscost is, therefore, $0.50 ($24,500 / 49,000). A similar computation
determines the number of units actually and potentially completed with the labor cost of
$29,140 and the factory overhead of $28,200. The 2,000 equivalent units in process
are added to the 45,000 units completed and transferred to obtain a total equivalent
production figure of 47,000 units for both labor and factory overhead (FOH). When the
equivalent production figure of 47,000 units is divided into the monthly labor cost of
$29,140, a unit cost for labor of $0.62 ($29,140 / 47,000) is computed. The unit cost for
factory overhead is $0.60 ($28,200 / 47,000). The unit cost added by the department is
$1.72, which is the sum of the materials, labor, and overhead unit costs - $0.50, $0.62, and
$0.60. This departmental unit cost figure cannot be determined by dividing the total
departmental cost of $81,840 by a single equivalent production figure, because no such
figure exists; units in process are at different stages of completion as to materials, labor
and factory overhead.
Disposition of Departmental Costs:
In the departmental cost report, the section titled "Cost Charged to the Department" shows
a total departmental cost of $81,840. The section titled "Cost Accounted for as Follows"
show the disposition of this cost. The 45,000 units transferred to the next department have
a cost of $77,000 (45,000 × $1.72). The balance of the cost to be accounted for, $4,440
($81,840 - $77,400), is the cost of work in process.
The inventory figure must be broken down into its component parts: materials, labor, and
factory overhead. These individual costs are easily determined. The cost of materials in
process is obtained by multiplying total units in process by the materials unit cost (4,000 ×
$0.50 = $2,000). The costs of labor and overhead in process is sufficient to complete only
50 percent or 2,000 of the units in process. Therefore, the cost of labor in process is $1,240
(2,000 × $0.62) and factory overhead in process is $1,200 (2,000 × $0.60).
Lost Units:
Continuous processing leads to the possibility of waste, seepage, shrinkage, and other
factors which cause loss or spoilage of production units. Management is interested not only
in the quantities reported as completed production, units in process, and lost units but also
in a comparison of planned and actual results. In verifying reported figures,
the accountant must reconcile quantities put into process with quantities reported as
completed and lost. One method of making such reconciliation is to establish the process
yield, i.e., the finished production that should result from processing various materials. This
yield is computed as follows:
Percent Yield = (Weight of finished product / weight of materials charged) × 100
The yield figure is useful to management for controlling materials consumption and ties in
closely with a firm's quality control procedures. Various yields are established as normal.
Yields below normal are measures of inefficiencies and are some times used to compute lost
units. Frequentlyquality control data are used to compute production costs, since the use of
incorrect quantities would result in incorrect unit costs.
Units Lost in the First Department:
Lost units reduce the number of units over which total cost can be spread, causing an
increase in unit costs. The 1,000 units lost in the Blending Department increase the units
costs of materials, labor, and factory overhead. Had these units not been lost, the
equivalent production figure would be 50,000 units for materials and 48,000 for labor and
factory overhead. The unit cost for materials would be $0.49 instead of $0.50; labor, $0.607
instead of 0.62; and factory overhead, $0.588 instead of $0.60. In the first department, the
only effect of losing units is an increase in the unit cost of the remaining good units. In this
situation, the loss is assumed to apply to all good units and to be within normal tolerance
limits.
Cost of Production Report
Department (2nd Department):
-
Testing
Learning Objective:
1. Prepare a cost of production report of second department in a process costing
2.
system.
How lost units are treated in process costing system when a cost of production
report of subsequent to the first department is prepared?
We recommend to see the cost of production report of the first department before you
continue.
Click here to see the cost of production report of the first department
The Clonex Corporation
Testing Department (2nd Dept.)
Cost of Production Report
For the Month of January, 19
Quantity Schedule:
Units received from the preceding department
45,000
======
Units transferred to next department
Units still in process (1/2 labor and FOH)
Units lost in process
40,000
3,000
2,000
Cost Charged To the Department:
Total
Cost
45,000
======
unit
Cost
$77,400
$1.72
29,140
28,200
------$81,840
0.91
0.80
----$1.71
0.08*
-----$3.51
======
Cost from preceding department:
Transferred in during the month
Cost added by the department:
Labor
Factory Overhead (FOH)
Total cost added
Adjusted for lost units
Total cost to be accounted for
------$147,510
======
Cost Accounted for as Follows:
Transferred to next department (40,000 × $3.51)
Work in process - ending inventory:
Adjusted cost from preceding department [3,000 × ($1.72
+ $0.08)]
$5,400
Labor (4,000 × 1/2 × $0.60)
910
Factory Overhead (4,000 × 1/2 × $0.60)
800
-----Total cost accounted for
Additional Computations
Equivalent Production:
Labor and factory overhead = 40,000 + 3,000 / 3 = 41,000 units
Unit Costs:
Labor = $37,310 / 41,000 = $0.91 per unit
Factory overhead = $32,800 / 41,000 = 0.80 per unit
$140,400
7,110
-----$147,510
======
*Adjustment for lost units:
Method No.1: $77,400 / 43,000 = $1.80; $1.80 - $1.72 = $0.08 per unit
Method No.2: 2,000 units × $1.72 = $3,440; $3,440 / 43,000 = $0.08 per unit
Explanation:
The Blending
Department
(first
department) transferred
45,000
units
to
the Testing Department, where labor and factory overhead were added before the units
were transferred to the Terminal Department (third or final department). Costs incurred in
the testing department resulted in theadditional departmental as well as cumulative unit
costs.
The cost of production report of the testing department differ from that of the Blending
Department (first department) in several respects. Several additional calculations are made,
for which space has been provided on the report. The additional information deals with:
1. Cost received from the preceding department.
2. An adjustment of the preceding department's unit cost because of lost units.
3. Cost received from the preceding department to be included in the cost of ending
work in process inventory.
The quantity schedule of the Testing Department shows that the 45,000 units received from
theBlending Department (first department) were accounted for as follows:
1. 40,000 units sent to terminal department.
2. 3,000 units still in process.
3. 2,000 units lost.
An analysis of the work in process (WIP) indicates that units in process are but one third
complete as to labor and factory overhead. Unit costs, $0.91 for labor and $0.80 for factory
overhead, were calculated as follows:
Equivalent production of the testing department is 41,000 units [40,000 + $1/3 × (3,000)],
the labor unit cost is $0.91 ($37,310 / 41,000), and the factory overhead unit cost $0.80
($32,800 / 41,000). There is no materials unit cost, since no materials were added by the
department. The department unit cost is $1.71, the sum of the labor unit cost of $0.91 and
the factory overhead unit cost of $0.80.
The testing department is responsible for the labor and factory overhead used as well as for
the cost of units received from the Blending Department (first department). This latter cost
is inserted as a cost charged to the department under the title "cost from preceding
department" which is immediately above the section of the report dealing with
cost added by the department. The cost transferred in was $77,400, previously shown in
the cost report of the Blending Department (first department) as cost transferred out of that
department by this journal entry:
Work in process - Testing department
Work in process - Blending department
77,400
77,400
The work in process account of the testing department is charged with cost received from
the preceding department and with $70,110 of departmental labor and factory overhead
(FOH), a total cost of $147,510 to be accounted for by the department.
Units Lost in the Department Subsequent to the First:
The Blending Department (first department) unit cost was $1.72 when 45,000 units were
transferred to the Testing Department. However, because 2,000 of these 45,000 units were
lost during processing in the Testing Department, the $1.72 unit cost figure no
longer applies and must be adjusted. The total cost of the units transferred remains at
$77,400, but 43,000 units must now absorb this total cost, causing an increase of $0.08 in
the cost per unit due to the loss of 2,000 units in the testing department.
The lost units cost can be computed by one of two methods.
Method No.1:
Determines a new unit cost work done in the preceding department and subtracts the
preceding departments old unit costs figure from the adjusted unit cost figure. The
difference between the tow figures is the additional cost due to the lsot units. $1.80 new
adjusted unit cost for work done in the preceding department is obtained by dividing the
remaining good units, 43,000 (45,000 - 2,000), into the cost transferred in, $77,400. The
old unit cost figure of $1.72 is subtracted from the revised unit cost to arrive at the
adjustment of $0.08.
Method No. 2:
Determines the lost units share of total cost and allocates this cost to the remaining good
units. total cost previously absorbed by the units lost is $3,440, which is the result of
multiplying the 2,000 lost units by their unit cost of $1.72. The $3,440 cost must now be
absorbed by the remaining good units. The additional cost to be picked up by each
remaining good unit is $0.08 (3,440 / 43,000 units).
The lost unit cost adjustment must be entered in the cost of production report. The$0.08 is
entered on the "Adjustment for lost units" line. The departmental unit cost of $1.71 does
not have to be adjusted for units lost. In the testing department, the cost of any work done
on lost units has automatically been absorbed in the departmental unit cost by using the
equivalent production figure of 41,000 instead of 43,000. The $1.72 unadjusted units cost
for work done in the preceding department, the $1.71 departmental unit cost, and the
$0.08 adjustment for lost units are totaled in order to obtain the $3.51 cumulative unit cost
for work done up to the end of operations in the testing department.
Timing of Lost Units:
Lost units may occur at the beginning, during, or at the end of a manufacturing process. For
purposes of practicality and simplicity, it is ordinarily assumed that units lost at the
beginning or during the process were never put in process. The cost of units lost is spread
over the units completed and units still in process.
When units are lost or are identified as lost at the end of a process, the cost of the lost units
is charged to completed units only. No part of the loss is charged to units still in process.
Assume that the 2,000 units lost by the testing department were the result of spoilage
found at final inspection by the quality control department; their cost would be charged only
the 40,000 finished units, as illustrated below:
The Clonex Corporation
Testing Department (2nd Dept.)
Cost of Production Report
For the Month of January, 19
Quantity Schedule:
Units received from the preceding department
45,000
======
Units transferred to next department
Units still in process (1/2 labor and FOH)
Units lost in process
40,000
3,000
2,000
Cost Charged To the Department:
Total
Cost
45,000
======
unit
Cost
$77,400
--------
$1.72
-------
37,310
32,800
------$70,110
------$147,510
======
0.87
0.76
----$1.63
-----$3.35
======
Cost from preceding department:
Transferred in during the month
Cost added by the department:
Labor
Factory Overhead (FOH)
Total cost added
Total cost to be accounted for
Cost Accounted for as Follows:
Transferred to next department [(40,000 × $3.51+$0.167)]*
Work in process - ending inventory:
From preceding department (3,000 × $1.72)
Labor (3,000 × 1/3 × $0.87)
Factory Overhead (3,000 × 1/2 × $0.76)
$140,720
$5,160
870
760
------
Total cost accounted for
6,790
-----$147,510
======
Additional Computations:
Equivalent Production:
Labor and factory overhead = 40,000 + 3,000 / 3 + 2,000 lost units = 41,000 units
Unit Costs:
Labor = $37,310 / 43,000 = $0.87 per unit
Factory overhead = $32,800 / 43,000 = $0.76 per unit
Lost unit cost = $3.35 × 2,000 units = $6,700 + 40,000 units $0.1675 per unit to be added to $3.35 to make the
transfer cost $3.5175.
*40,000 units $3.5175 = $140,700. To avoid a decimal discrepancy, the cost transferred is computed: $147,510 $6,790 = $140,720.
A comparison of the differences between the two cost of production reports for the testing
departments as to amounts for costs of units transferred and work in process inventory is
shown below the production report. Not the offsetting increases and decreases.
In this illustration, the assumption has been made that the lost units, identified at the end
of the process, were complete as to all costs. In sum companies, members of the quality
control or inspection departments make production checks prior to the end of the process.
Such a procedure uncovers lost units that are not complete when the loss is incurred or the
spoilage discovered and yet the loss may pertain only to units completed and not to units
still in process. In such a case the lost units should be adjusted for their equivalent stage of
completion. For example, 2,000 units lost at the 90% stage of conversion would appear as
1,800 equivalent units with regard to labor and factory overhead costs.
Normal Vs Abnormal Loss of units:
Units are lost through evaporation, shrinkage, substandard yields, spoiled work, poor work
man ship, or inefficient equipment. In many instances the nature of operations makes
certain losses normal or unavoidable, because they are considered with in normal tolerance
limits for human and machine errors. The cost of these normally lost units does not appear
as a separate item of cost but is spread over the remaining good units.
A different situation is created by abnormal or avoidable spoilage or losses that are not
expected to arise under normal, efficient operating conditions. The cost of such abnormal
spoilage or losses is charged either to factory overhead as shown below, thereby appearing
as an additional unfavorable able factory overhead variance, or directly to a current period
expense account and reported as a separate item in the cost of goods sold statement.
Factory Overhead Control
Work in process - Testing Department
(lost units)
6,700
6,700
The cost of production report would show the abnormal spoilage or loss as follows:
Transferred to next department (40,000 units × $3.35) ..............$134,020*
Transferred to factory overhead [40,000 units × $0.1675) or
(2,000 lost units × $3.35)].......................................................6,700
*40,000 units × $3.35 = $134,000. To avoid decimal discrepancy, the cost transferred is computed: $147,510 - $6,790
ending inventory - $6,700 = $134,020
If the lost units were only partially complete, equivalent production calculations should
consider their stage of completion when lost or spoiled, and the costing of the abnormal loss
should be weighted accordingly. If one part of the loss is normal and another abnormal,
each portion must be treated in accordance with the above discussion. The critical factor in
distinguishing between normal and abnormal spoilage or loss is the degree of controllability.
Normal or unavoidable spoilage or loss is produced by the process under efficient operating
conditions, referred to as uncontrollable. Abnormal or avoidable spoilage or loss is
considered unnecessary, because the conditions resulting in the loss are controllable. For
this reason, within the limits set by the state of the art of production, the difference is a
short-run condition; in the long run, management should adjust and control all factors of
production and eliminate all abnormal conditions.
The cost of production report at the beginning of this page shows a total cost of $147,510 to
be accounted for by the Testing department. The department completed and transferred
40,000 units to the Terminal Department (third or final department) at a cost of $140,000
(40,000 ×$3.51). The remaining cost is assigned to the work in process inventory. This
balance is broken down by the various costs in process. When computing the cost of the
ending work in process inventory of any department subsequent to the first, costs received
from the preceding departments must be included.
The 3,000 units still in process, completed by the Blending Department (first department) at
a unit cost of $1.72, were later adjusted by $0.08 (to $1.80) because of the loss of some of
the units transferred. Therefore, the Blending Department's (first department) cost of the
3,000 units still in process is $5,400 figure is not broken down further , since such
information is not pertinent to the Testing Department's operations. However, the amount is
listed separately in the cost of production report, because it is part of the Testing
Department's ending work in process inventory.
Materials (if any), labor, and factory overhead (FOH) added by a department are costed
separately in order to arrive at total work in process (WIP). In the testing department, no
materials were added to the units received; thus, the ending inventory shows no materials
in the process. However, labor and factory overhead costs were incurred. The work in
process analysis stated that labor and factory overhead used on the units in process were
sufficient to complete 1,000 units. The cost of labor in process is $910 (1,000 × $0.91) and
factory overhead is process is $800 (1,000 × $0.80). The total cost of the 3,000 units in
process is $7,110 ($5,400 + $910 + $800). This cost, added to that transferred to
the Terminal Department (third or final department), $140,400, accounts for the total cost
of $147,510 charged to the Testing Department.
Cost of Production Report - Terminal
Department (3rd - Final Department):
We recommend to see the cost of production report of the first and second department
before you continue.
1. Click here to see the cost of production report of the first department
2. Click here to see the cost of production report of Second Department
The cost of production report of 3rd and final department is illustrated below:
The Clonex Corporation
Terminal Department (3rd Dept.)
Cost of Production Report
For the Month of January, 19
Quantity Schedule:
Units received from the preceding department
40,000
======
Units transferred to finished goods storeroom
Units still in process (1/4 labor and FOH)
Units lost in process
35,000
4,000
1,000
Cost Charged To the Department:
Total
Cost
40,000
======
unit
Cost
$140,400
$3.51
32,400
19,800
------$52,500
0.90
0.55
----$1.45
0.09*
-----$5.05
======
Cost from preceding department:
Transferred in during the month
Cost added by the department:
Labor
Factory Overhead (FOH)
Total cost added
Adjusted for lost units
Total cost to be accounted for
------$192,600
======
Cost Accounted for as Follows:
Transferred to finished goods storeroom (35,000 × $5.05)
Work in process - ending inventory:
Adjusted cost from preceding department [4,000 ×
($3.51 + $0.09)]
$14,400
Labor (4,000 × 1/4 × $0.90)
900
Factory Overhead (4,000 × 1/4 × $0.55)
550
-----Total cost accounted for
Additional Computations:
Equivalent Production:
Labor and factory overhead = 35,000 + 4,000 / 4 = 36,000 units
Unit Costs:
Labor = $32,400 / 36,000 = $0.90 per unit
Factory overhead = $19,800 / 36,000 = 0.55 per unit
*Adjustment for lost units:
Method No.1: $140,400 / 39,000 = $3.60; $3.60 - $3.51 = $0.09 per unit
$176,750
15,850
-----$192,600
======
Method No.2: 1,000 units × $3.51 = $3,510; $3,510 / 39,000 = $0.09 per unit
Explanation:
Total and unit cost figures were derived by using procedures discussed for the cost of
production report of the Testing Department. The work completed is transferred to the
finished goods storeroom; thus, the title "Transferred to finished goods storeroom" is used
in place of the title "Transferred to next department." Cost charged to the Terminal
Department come from the payroll distribution and the department's expense analysis
sheet. The journal entry transferring costs from the Testing Department follows:
Work in process - Terminal Department
Work in process - Testing Department
140,000
140,000
The entry to transfer finished units to the finished goods storeroom is presented below:
Finished Goods
Work in process - Terminal Department
176,750
176,750
Combined Cost of Production Report (CPR)
- Process Costing:
The three cost of production reports for the Clonex Corpora have been discussed and
computed separately.



Click here to see the cost of production report of Blending Department (first
department)
Click here to see the cost of production report of Testing Department (second
department)
Click here to see the cost of production report of Terminal Department (third or final
department)
These reports would most likely be consolidated in a single report summarizing
manufacturing operations of the firm for a specific period. Such a report,
as illustrated below, should be reviewed in order to observe the interrelationship of the
various department reports.
The Clonex Corporation
Cost of Production Report
All Producing Departments
For the Month of January, 19
Quantity Schedule:
Units started in process
Units received from the preceding department
Units transferred to next department
Blending
1stDepartment
50,000
======
45,000
Testing 2ndDepartment
Terminal
3rdDepartment
45,000
======
40,000
40,000
======
Units transferred to finished goods storeroom
35,000
Units still in process
4,000
3,000
4,000
Units lost in process
1,000
------50,000
======
Total
unit cost
Cost
2,000
------45,000
======
Total
unit
cost
Cost
1,000
------40,000
======
Total cost
unit
Cost
Cost Charged To the Department:
Cost from preceding department:
Transferred in during the month
$77,400
$1.72
$140,400
$3.51
--------
-----
--------
-----
Cost added by the department:
Materials
$24,500
$.50
Labor
29,140
.62
$37,310
$.91
$32,400
$.90
Factory Overhead (FOH)
28,200
------$81,840
.60
---$1.72
32,800
----$70,110
.80
---$1.71
$.08
19,800
------$52,200
.55
---$1.45
$.09
------$81,840
---$1.72
------$147,510
----$3.51
-------$192,600
---$5.05
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===
======
===
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Total cost added
Adjusted for lost units
Total cost to be accounted for
Cost Accounted for as Follows:
Transferred to next department
$77,400
$140,400
Transferred to finished goods storeroom (35,000 ×
$5.05)
Work in process - ending inventory:
$176,750
Adjusted cost from preceding department [4,000 ×
($3.51 + $0.09)]
$5,400
$14,400
Materials
$2,000
Labor (4,000 × 1/4 × $0.90)
1,240
910
900
1,200
-----4,440
-------$81,840
======
800
-----7,110
-----$147,510
======
550
-----15,850
-------$192,600
======
Factory Overhead (4,000 × 1/4 × $0.55)
Total cost accounted for