Rosenthal Company manufactures bowling balls through two processes: Molding and Packaging. In the Molding Department, the urethane, rubber, plastics, and other materials are molded into bowling balls. In the Packaging Department, the balls are placed in cartons and sent to the finished goods warehouse. All materials are entered at the beginning of each process. Labor and manufacturing overhead are incurred uniformly throughout each process. Production and cost data for the Molding Department during June 2020 are presented below.

Production Data June
Beginning work in process units 0
Units started into production 28,380
Ending work in process units 2,580
Percent complete—ending inventory 40%
Cost Data Materials $255,420
Labor 69,144
Overhead 145,512
Total $470,076

Instructions:
(a) Prepare a schedule showing physical units of production.
(b) Determine the equivalent units of production for materials and conversion costs.
(c) Compute the unit costs of production.
(d) Determine the costs to be assigned to the units transferred out and in process for June.
(e) Prepare a production cost report for the Molding Department for the month of June.

Solution:

a) Physical units

Units to be accounted for

Work in process, June 1                              0

Started into production                          28,380

Total units                                                28,380

Units accounted for

          Transferred out                             25,800

          Work in process, June 30             2,580  

          Total units                                       28,380

(b )Equivalent units

                                                    Materials            Conversion Costs

Units transferred out                    25,800                     25,800

Work in process, June 30

           2,580 X 100%                      2,580

             2,580 X 40%                                                        1032

Total equivalent units                     28,380                        26,832

(c)                                                                       Unit Costs

Materials                                                $9.00 ($255,420 ÷ 25,800)

Conversion costs                                  $8.00 ($166,400* ÷ 20,800

Total unit cost                                          $17.00 ($9.00 + $8.00)

*$53,600 + $112,800

(d) Costs accounted for

Transferred out 25,800  X $17.00)                $438600

Work in process, June 30

Materials (2,580 X $9.00)                                 $23,220

Conversion costs (1032 X $8.00)                        8256

                                                                              31476

Total costs                                                           $470076

(e)                               ROSENTHAL COMPANY

                                     Molding Department

                                    Production Cost Report

                             For the Month Ended June 30, 2012

                                                                      Equivalent Units

Quantities                                  Physical Units   Materials  ConversionCosts

                                                        (Step 1)                          (Step 2)

Units to be accounted for

Work in process, June 1                       0

Started into production                  28,380

Total units                                        28,380

Units accounted for

Transferred out                                25,800       25,800            25,800            

Work in process, June 30               2,580            2,580            1032  

Total units                                         28,380        28,380             26,830

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