Cost of Production Report - Terminal Department (3rd - Final Department):
We
recommend to see the cost of production report of the first and second department
before you continue.
-
Click here to see the
cost of production report of the first department
-
Click here to see the cost of production report of Second Department
The cost of production report of 3rd and final department is
illustrated below: The Clonex Corporation
Terminal Department (3rd Dept.)
Cost of Production Report
For the Month of January, 19
Quantity Schedule: |
|
|
Units received from the preceding
department |
|
40,000
====== |
Units transferred to finished
goods storeroom |
35,000 |
|
Units still in process (1/4 labor and FOH) |
4,000 |
|
Units lost in process |
1,000 |
40,000
====== |
Cost Charged To the Department: |
Total
Cost |
unit
Cost |
|
Cost from preceding department: |
|
|
Transferred in during the month |
$140,400 |
$3.51 |
Cost added by the department: |
|
|
Labor |
32,400 |
0.90 |
Factory Overhead (FOH) |
19,800
------- |
0.55
----- |
Total cost added |
$52,500 |
$1.45 |
Adjusted for lost units |
|
0.09* |
|
------- |
------ |
Total cost to be accounted for |
$192,600 |
$5.05 |
|
====== |
====== |
Cost Accounted for as Follows: |
|
|
Transferred to finished goods
storeroom
(35,000 × $5.05) |
|
$176,750 |
Work in process - ending
inventory: |
|
|
Adjusted cost from preceding
department [4,000 × ($3.51 + $0.09)] |
$14,400 |
|
Labor (4,000 × 1/4 × $0.90) |
900 |
|
Factory Overhead (4,000 × 1/4 ×
$0.55) |
550
------ |
15,850
------ |
Total cost accounted for |
|
$192,600 |
|
|
====== |
|
|
|
Additional Computations:
Equivalent Production:
Labor and factory overhead = 35,000 + 4,000 / 4 = 36,000 units
Unit Costs:
Labor = $32,400 / 36,000 = $0.90 per unit
Factory overhead = $19,800 / 36,000 = 0.55 per unit
*Adjustment for lost units:
Method No.1: $140,400 / 39,000 = $3.60; $3.60 - $3.51 = $0.09
per unit
Method No.2: 1,000 units
×
$3.51 = $3,510; $3,510 / 39,000 = $0.09 per unit
|
Explanation:
Total and unit cost figures were
derived by using procedures discussed for the cost of production report
of the
Testing Department. The work completed is transferred to the
finished goods storeroom; thus, the title "Transferred to finished goods
storeroom" is used in place of the title "Transferred to next
department." Cost charged to the Terminal Department come from the
payroll distribution and the department's expense analysis sheet. The
journal entry transferring costs from the Testing Department follows:
Work in process - Terminal
Department
140,000
Work in process -
Testing Department
140,000 The entry to transfer finished units to the finished goods
storeroom is presented below:
Finished Goods
176,750
Work in process -
Terminal Department
176,750
|