Management Accounting 1
Question 1
The Mitchell Construction Company uses a process-cost system. Materials are added at the beginning of a particular process and conversion costs are incurred uniformly. The following data relates to February 2017:
Opening work in progress 400 units
Units started during the month 5,200 units
Closing work in progress 150 units
Cost of materials in April €31,980
Conversion costs in April €21,580
Cost of materials, opening work in progress €2,740
Conversion costs, opening work in progress €640
The opening work in progress is fully complete regarding materials and 40% complete regarding conversion costs.
The closing work in progress is fully complete regarding materials and 70% complete regarding conversion costs.
No units were lost in the production process in February 2017
Required:
Prepare a cost-of-production report for February 2017, indicating the cost of finished goods and the cost of closing work in progress using the following two methods:
(a) The first-in-first-out method (FIFO); and
(b) The weighted-average method.
