In its Department R, Recyclers, Inc., processes donated scrapcloth into towels for sale in...

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Accounting

In its Department R, Recyclers, Inc., processes donated scrapcloth into towels for sale in local thrift shops. It sells theproducts at cost. The direct materials costs are zero, but theoperation requires the use of direct labor and overhead. Thecompany uses a process costing system and tracks the processingvolume and costs incurred in each period. At the start of thecurrent period, 300 towels were in process and were 60 percentcomplete. The costs incurred were $576.
During the month, costs of $10,800 were incurred, 2,700 towelswere started, and 150 towels were still in process at the end ofthe month. At the end of the month, the towels were 20 percentcomplete.
Required:
a. Prepare a production cost report; thecompany uses FIFO process costing.
RECYCLERS, INC.
Production CostReport—FIFO
Flow of ProductionUnits Compute EquivalentUnits
Physical Units Conversion Costs
Units to beaccounted for:
Beginning WIPinventory 300
Units started thisperiod
Total units to beaccounted for 300
Units accountedfor:
Units completedand transferred out:
From beginninginventory
Started andcompleted currently
Units in endingWIP inventory
Totalunits accounted for 0
0
Costs TotalCosts Conversion Costs
Costs to be accounted for:
Costs in beginning WIP inventory
Current period costs
Total costs to be accounted for $0 $0
Cost per equivalent unit:
Conversion costs
Costs accounted for:
Costs assigned to units transferredout:
Costs from beginning inventory
Current costs added to completebeginning WIP inventory:
Conversion costs
Total costs from beginninginventory $0
Current costs of units started andcompleted:
Conversion costs
Total costs of units started andcompleted $0
Total costs of units transferredout $0
Costs assigned to ending WIPinventory:
Conversioncosts
Total ending WIPinventory $0
Totalcosts accounted for $0 $0
b. Show the flow of costs through T-accounts.Assume that current period conversion costs are credited to variouspayables.
Work in Process Various Payables
Beginning inventory Beg.bal.
Thisperiod's costs: End.bal.
Endinginventory
Finished Goods Inventory
Beg.bal.
End.bal.

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4.2 Ratings (565 Votes)

Solution a Recyclers Inc Department R Computation of Equivalent unit FIFO Particulars Physical units Conversion Units to be accounted for Beginning WIP Inventory 300 Units started this period 2700 Total unit to be accounted for 3000 Units Accounted for Units completed and transferred out From beginning inventory 40 300 See Answer

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In: AccountingIn its Department R, Recyclers, Inc., processes donated scrapcloth into towels for sale in local...In its Department R, Recyclers, Inc., processes donated scrapcloth into towels for sale in local thrift shops. It sells theproducts at cost. The direct materials costs are zero, but theoperation requires the use of direct labor and overhead. Thecompany uses a process costing system and tracks the processingvolume and costs incurred in each period. At the start of thecurrent period, 300 towels were in process and were 60 percentcomplete. The costs incurred were $576.During the month, costs of $10,800 were incurred, 2,700 towelswere started, and 150 towels were still in process at the end ofthe month. At the end of the month, the towels were 20 percentcomplete.Required:a. Prepare a production cost report; thecompany uses FIFO process costing.RECYCLERS, INC.Production CostReport—FIFOFlow of ProductionUnitsCompute EquivalentUnitsPhysical UnitsConversion CostsUnits to beaccounted for:Beginning WIPinventory300Units started thisperiodTotal units to beaccounted for300Units accountedfor:Units completedand transferred out:From beginninginventoryStarted andcompleted currentlyUnits in endingWIP inventoryTotalunits accounted for00CostsTotalCostsConversion CostsCosts to be accounted for:Costs in beginning WIP inventoryCurrent period costsTotal costs to be accounted for$0$0Cost per equivalent unit:Conversion costsCosts accounted for:Costs assigned to units transferredout:Costs from beginning inventoryCurrent costs added to completebeginning WIP inventory:Conversion costsTotal costs from beginninginventory$0Current costs of units started andcompleted:Conversion costsTotal costs of units started andcompleted$0Total costs of units transferredout$0Costs assigned to ending WIPinventory:ConversioncostsTotal ending WIPinventory$0Totalcosts accounted for$0$0b. Show the flow of costs through T-accounts.Assume that current period conversion costs are credited to variouspayables.Work in ProcessVarious PayablesBeginning inventoryBeg.bal.Thisperiod's costs:End.bal.EndinginventoryFinished Goods InventoryBeg.bal.End.bal.