Paper is added 100% at the beginning of the process
Binding is added 100% as the last step in the manufacturing process Conversion costs
Direct labor and factory overhead are added equally throughout the process At the beginning of the accounting period it is estimated that production will be 60000 practice sets. Estimated factory overhead for the period is $30000. This
information is to be used to determine rate for the factory overhead. Direct materials
Purchase of paper 12000 reams @ $3.00 a ream
Each ream contains 500 sheets of paper and each practice set contains 100 sheets of paper.
The company starts printing of 55000 practice sets Purchase of 60000 units of binding @ $.15
Used 46000 units of bindings this period Estimated and actual direct labor costs totaled $96500
Actual factory overhead costs totaled $27000 Ending work in process is 100% complete as to paper
25% complete as to conversion costs
0% complete as to binding The finished good inventory at January 1 2012 had a balance of 30000 practice sets and at December 31 2012 had an ending balance of 40000 practice sets. The selling price of each practice set is $10.00 Assume all material purchases and sales were made on account.
Assume all other transactions were on the cash basis
Operating expense this period totaled $80000 1. Prepare an equivalent units schedule. The schedule should have a minimum of the following information. (XXX represents a number) Whole Units Direct Materials Direct Materials Conversion Costs
Beginning XXX XXX XXX XXX
Start/Comp XXX XXX XXX XXX
Ending XXX XXX XXX XXX 2. Calculate the cost per equivalent unit for the direct materials (paper) direct materials (bindings) and conversion costs. (Do not round your numbers) 3. Prepare a cost production report using FIFO costing.