Discuss average costing method and two time periods

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Process Costing: Average Costing Method and Two Time Periods

P8. Box Corporation produces a line of beverage boxes. The production process has been automated, so the product can now be produced in one operation rather than in the three operations that were needed before the company purchased the automated machinery. All direct materials are added at the beginning of the process, and conver- sion costs are incurred uniformly throughout the process. Operating data for July and August follow.

 

Beginning work in process inventory: Units (July: 20% complete)

July

 

20,000

August

 

?

Direct materials

$20,000

$6,000

Conversion costs Production during the month:

$30,000

$6,000

Units started

70,000

90,000

Direct materials

$34,000

$59,000

Conversion costs

$96,000

$130,800

Ending work in process inventory:

Units (July: 40% complete; August: 60% complete)            10,000                25,000

1. Using the average costing method, prepare process cost reports for July and August.

Reference no: EM131774483

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