Reference no: EM132855251
Production Cost Report: Weighted Average Method.
Calvin Chemical Company produces a chemical used in the production of silicon wafers. Calvin Chemical uses the weighted average method for its process costing system. The Mixing department at Calvin Chemical began the month of June with 5,000 units (gallons) in work-in-process inventory, all of which were completed and transferred out during June. An additional 15,000 units were started during the month, 11,000 of which were completed and transferred out during June.
A total of 4,000 units remained in work-in-process inventory at the end of June and were at varying levels of completion, as shown in the following.
Direct materials 60 percent complete
Direct labor 40 percent complete
Overhead 40 percent complete
The cost information is as follows:
Costs in beginning work-in-process inventory
Direct materials $8000
Direct labor $3000
Overhead $2800
Costs incurred during the month
Direct materials $21000
Direct labor $8500
Overhead $7200
Problem 1: Prepare T-accounts for the following accounts: cash, accounts receivable, prepaid insurance, prepaid rent, raw materials inventory, work-in-process inventory, finished goods inventory, accumulated depreciation (building and equipment), accounts payable, wages payable, manufacturing overhead, sales, cost of goods sold, advertising expense (selling), rent expense (selling), wages expense (selling), depreciation expense (G&A), rent expense (G&A), and wages expense (G&A). Enter beginning balances in T-accounts for the inventory accounts (raw materials, work in process, and finished goods).
Problem 2: Prepare a production cost report for the Mixing department at Calvin Chemical Company for the month of June.
Problem 3: According to the production cost report, what is the total cost per equivalent unit for the work performed in the Mixing department? Which of the three product cost components is the highest, and what percent of the total does this product cost represent?