Answer and Explanation:
The Preparation of production cost report for the Welding Department for the month of February is shown below:-
Healthy Company
Welding Department
Production cost report
For the month of Feb
Equivalent units
Quantities Physical units Materials Conversion costs
Units to be accounted for
Work in progress 1 Feb 14,500
Started into production 50,600
Total units 65,100
Units accounted for
Transferred out 55,300 55,300 55,300
Work in progress
28 Feb 9,800 9,800 1,960
(9,800 × 1 ÷ 5)
Total units 65,100 65,100 57,260
Costs Material costs Conversion costs Total
Total cost 282,534 188,958 471,492
Equivalent cost 65,100 57,260 122,360
Unit costs 4.34 3.3 3.86
Cost to be accounted for
Work in progress Feb 1 32,660
(17,600 + 15,060)
Started into production 316,472
(199,834 + 67,400 + 49,238)
Total costs 349,132
Working note:-
For Material cost = (17,600 + 199,834 + 65,100)
For Conversion cost = (15,060 + 67,400 + 49,238 + 57,260)
Cost reconciliation schedule
Cost accounted for
Transferred out 213,458
(55,300 × 3.86)
Work in progress Feb 28
Material 42,532
(9,800 × 4.34)
Conversion 6,468 49,000
(1,960 × 3.3)
Total cost 262,458
