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ROMALY, INC. has several processing departments. Costs charged to the Forming Department for December 2011 totaled $1,467,000 as follows:

Work in Process, December 1
Materials		$ 103,400
Conversion costs		60,000	$ 163,400
Costs Added:
Materials added		$ 1,100,800
Labor	$ 100,000
Manufacturing Overhead	102,800
Total Conversion Costs		202,800
Total Cost added			1,303,600
Total Department Costs			$ 1,467,000

Production records show that:

1. 60,000 units were in beginning work in process inventory

a. 25% complete as to materials costs

b. 70% complete as to conversion cost

2. 410,000 units were started into production

3. 40,000 units were in ending work in process inventory

a. 40% complete as to materials costs

b. 20% complete as to conversion costs.

Required:

a. Compute the physical unit flow, step 1.

b. Determine the equivalent units of production for materials and conversion costs, step 2.

c. Compute the unit cost of production, step 3.

d. Determine the costs to be assigned to the units transferred out and in process.

e. Prepare a production cost report for the Forming Department for the month of December.

FOUR SPETS TO PREPARE PRODUCTION COST REPORT

FORMING DEPARTMENT INFORMATION
WIP, Dec/1 (Beginning Inventory)
DIRECT MATERIALS: _____________Units X _____% COMPLETED
CONVERSION COSTS: _____________Units X _____ %COMPLETED
UNITS STARTED IN PRODUCTION DURING DECEMBER
UNITS COMPLETED AND TRANSFERRED OUT TO PACKING
WIP, Dec/31 (Ending Inventory)
DIRECT MATERIALS: _____________Units X _____% COMPLETED
CONVERSION COSTS: _____________Units X _____% COMPLETED
C O S T S
WIP, Dec/1 (Bebinning Inventory)
DIRECT MATERIALS			$
CONVERSION COSTS
TOTAL COST OF WIP, Dec/1 (Beginning Inventory)			$
COSTS ADDED DURING PRODUCTION IN DECEMBER
DIRECT MATERIALS	$
CONVERSION COSTS (DL $_________ + MOH $__________)
TOTAL COST ADDED IN DECEMBER
TOTAL COST AS OF DECEMBER 31

Part a. Compute the physical units flow (step 1).

FORMING DEPARTMENT
PHYSICAL UNITS TO BE ACCOUNTED FOR
WIP, Dec 1 (Beginning Inventory)
STARDED (TRANSFERRED) INTO PRODUCTION
TOTAL UNITS
COMPLETED AND TRANSFERRD OUT
WIP, Dec 31 (Ending Inventory)
TOTAL UNITS

Part b. Determine the equivalent units of production for materials and conversion costs (step 2).

FORMING DEPARTMENT
	EQUIVALENT UNITS
	MATERIAL	CONVERSION COSTS
UNITS TRANSFERRED OUT
WIP, Dec 31 (Ending Inventory) MATERIALS
WIP, Dec 31 (Ending Inventory)CONVERSION COST
TOTAL EQUIVALENT UNITS

Part c. Compute the unit cost of production (Sept 3).

STEP 3: COMPUTE UNIT PRODUCTION COSTS (15 Puntos)
FORMING DEPARTMENT
M A T E R I A L C O S T S PER UNIT
WIP, Dec 1 (Beginning Inventory) Direct Material		$
Material Costs incurred or added into production during December
Total Material Costs		$
TOTAL MATERIAL COSTS / EQUIVALENT UNITS = UNITS MATERIAL COST $_____________ DIVIDIDO ENTRE ___________ = $________
C O N V E R S I O N C O S T S PER UNIT
WIP, Dec 1 (Beginning Inventory) Conversion costs		$
Conversion costs incurred or added into production during December
TOTAL CONVERSION COSTS		$
TOTAL CONVERSION COSTS / EQUIVALENT UNITS = UNIT CONVERSION COST $__________ DIVIDIDO ENTRE ___________ = $_________
MATERIAL UNIT COST	$
CONVERSION UNIT COST
TOTAL MANUFACTURING UNIT COST	$

Part d. Determine the costs to be assigned to the units transferred out and in process (Step 4)

FORMING DEPARTMENT
C O S T RECONCILIATION REPORT
COST ACCOUNTED FOR
WIP, Dec 1 (Beginning Inventory)		$
STARTED INTO PRODUCTION
TOTAL COSTS		$
COST ACCOUNTED FOR
Completed & Transferred Out		$
WIP Ending Inventory- Dec 31 MATERIALS	$
WIP Ending Inventory- Dec31 CONVERSION COSTS
TOTAL WIP Dec 31 (Ending Inventory)
TOTAL COSTS		$

Part e. Prepare a production cost report for the Forming Department for the month of December.

FORMING DEPARTMENT
PRODUCTION COST REPORT
FOR THE MONTH ENDED DECEMBER 31, 2011
STEPS 1 AND 2
	PHYSICAL UNITS
UNITS TO BE ACCOUNTED FOR	STEP 1
WIP, Dec 1 (Beginning Inventory)
STARTED INTO PRODUCTION
TOTAL UNITS				STEP 2
	STEP 1			EQUIVALENT UNITS
UNITS TO BE ACCOUNTED FOR	PHYSICAL UNITS			MATERIALS			CONVERSION COSTS
TRANSFERRED OUT
WIP, Dec 31 (Ending Inventory)
TOTAL UNITS
STEP 3
U N I T C O S T S
COSTS			MATERIALS		CONVERSION COSTS			TOTAL
TOTAL COSTS AS OF DECEMBER		(a)	$		$			$
EQUIVALENT UNITS		(b)
UNIT COST a/b			$		$			$
STEP 4
C O S T ACCOUNTED FOR
WIP, Dec 1 (Beginning Inventory)									$
STARTED INTO PRODUCTION
TOTAL COST FOR THE MONTH OF DECEMBER									$
COST RECONCILIATION SCHEDULE
Completed & Transferred Out									$
WIP Ending Inventory-Dec 31-Direct Material Costs(Equivalent Units)						$
WIP Ending Inventory-Dec 31-Conversion Costs (Equivalent Units)
Total Costs WIP Ending Inventory-Dec 31 (Based on equivalent units)
TOTAL COST FOR THE MONTH OF DECEMBER 2011									$

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