The Welding Department of Healthy Company has the following production and manufacturing cost data for February 2017. All materials are added at the beginning of the process.

Manufacturing Costs

Beginning work in process

Materials $17,600

Conversion costs 15,060 $22,660

Materials 199,834

Labor 67,400

Overhead 49,238

Production Data

Beginning work in process 14,500 units, 1/10 complete

Units transferred out 55,300

Units started 50,600

Ending work in process 9,800 units, 1/5 complete

1. Prepare a production cost report for the Welding Department for the month of February. (Round unit costs to 2 decimal places, e. g. 2.25 and all other answers to 0 decimal places, e. g. 1,225.)

Answer and Explanation:

The Preparation of production cost report for the Welding Department for the month of February is shown below:-

Healthy Company

Welding Department

Production cost report

For the month of Feb

Equivalent units

Quantities Physical units Materials Conversion costs

Units to be accounted for

Work in progress 1 Feb 14,500

Started into production 50,600

Total units 65,100

Units accounted for

Transferred out 55,300 55,300 55,300

Work in progress

28 Feb 9,800 9,800 1,960

(9,800 * 1 : 5)

Total units 65,100 65,100 57,260

Costs Material costs Conversion costs Total

Total cost 282,534 188,958 471,492

Equivalent cost 65,100 57,260 122,360

Unit costs 4.34 3.3 3.86

Cost to be accounted for

Work in progress Feb 1 32,660

(17,600 + 15,060)

Started into production 316,472

(199,834 + 67,400 + 49,238)

Total costs 349,132

Working note:-

For Material cost = (17,600 + 199,834 + 65,100)

For Conversion cost = (15,060 + 67,400 + 49,238 + 57,260)

Cost reconciliation schedule

Cost accounted for

Transferred out 213,458

(55,300 * 3.86)

Work in progress Feb 28

Material 42,532

(9,800 * 4.34)

Conversion 6,468 49,000

(1,960 * 3.3)

Total cost 262,458