Maple Inc. Manufactures Syrup That Goes Through Three Proces
Maple Inc Manufactures Syrup That Goes Through Three Processing Stag
Maple, Inc. manufactures syrup that goes through three processing stages prior to completion. Information on work in the first department, blending, is given below for August: Production Data: Pounds in process, August 1; materials 100% complete; conversion 70% complete 3,000 Pounds started into production during August 85,000 Pounds completed and transferred out ? Pounds in process, August 31; materials 80% complete; conversion 30% complete 6,000 Cost Data: Work in process inventory, August 1: Materials cost $900 Conversion cost $5,900 Cost added during August: Materials cost $151,000 Conversion cost $161,700 The company uses the weighted-average method. Instructions: Submit an Excel document, with each tab labeled by item number, which demonstrates the following: Compute the equivalent units of production. Compute the costs per equivalent unit for the month. Determine the cost of ending work in process inventory and of the units transferred out to the next department. Prepare a cost reconciliation schedule for the month. Provide your answers in a clearly organized Excel spreadsheet. Check spelling and formatting for readability. Document your sources. APA citations.
Paper For Above instruction
Maple Inc.'s production process in August involved significant complexities in calculating the equivalent units of production, cost per unit, and preparing a comprehensive cost reconciliation schedule. Using the weighted-average method, this analysis seeks to accurately allocate costs between completed units and ending inventory, ensuring precise valuation of work in process and transferred units.
Introduction
The first stage of Maple Inc.'s syrup manufacturing process, blending, involves both direct materials and conversion costs that need to be carefully apportioned to reflect the work completed during August. The paramount task is to determine the equivalent units of production, which serve as the basis for calculating unit costs. Subsequently, costs are allocated to units transferred out and to ending inventory, which are essential for financial reporting and internal decision-making.
Calculating Equivalent Units of Production
Equivalent units of production (EUP) quantify the amount of work done during the period expressed in fully completed units. Under the weighted-average method, EUP combines units completed and transferred out with equivalent units in ending inventory.
First, calculate the units to account for:
- Beginning work-in-process (WIP): 3,000 pounds
- Started into production: 85,000 pounds
- Ending WIP: 6,000 pounds
Total units to account for = Beginning WIP + Started = 3,000 + 85,000 = 88,000 pounds
Units completed and transferred out = ? (to be derived)
Units in ending WIP = 6,000 pounds
Units transferred out = Total units to account for - Ending WIP = 88,000 - 6,000 = 82,000 pounds
Next, calculate the equivalent units considering the percentage completion of ending WIP:
- Materials are 80% complete in ending WIP, so equivalent units for materials = 6,000 * 80% = 4,800 units
- Conversion costs are 30% complete in ending WIP, so equivalent units for conversion = 6,000 * 30% = 1,800 units
For units transferred out, which are assumed to be 100% complete under the weighted-average method, equivalent units are 82,000 units for both materials and conversion costs.
Calculating Cost Per Equivalent Unit
Total costs to account for include prior period costs and costs added during August:
- Beginning inventory materials: $900
- Beginning inventory conversion: $5,900
- Costs added during August: Materials: $151,000; Conversion: $161,700
Total materials cost = $900 + $151,000 = $151,900
Total conversion cost = $5,900 + $161,700 = $167,600
Total equivalent units for materials = 82,000 (transferred out) + 4,800 (ending WIP) = 86,800 units
Total equivalent units for conversion = 82,000 + 1,800 = 83,800 units
Cost per equivalent unit:
- Materials: $151,900 / 86,800 = approximately $1.75 per unit
- Conversion: $167,600 / 83,800 = approximately $2.00 per unit
Cost of Ending Work in Process Inventory and Units Transferred Out
Ending WIP costs:
- Materials: 4,800 units * $1.75 = $8,400
- Conversion: 1,800 units * $2.00 = $3,600
Total ending WIP cost = $8,400 + $3,600 = $12,000
Cost of units transferred out:
- Materials: 82,000 units * $1.75 = $143,500
- Conversion: 82,000 units * $2.00 = $164,000
Total transferred out cost = $143,500 + $164,000 = $307,500
Cost Reconciliation Schedule
| Description | Cost |
|---|---|
| Total costs to account for | $151,900 (materials) + $167,600 (conversion) = $319,500 |
| Cost of units transferred out | $307,500 |
| Ending work in process inventory | $12,000 |
The cost reconciliation demonstrates that the total costs allocated match the total costs to account for, verifying the accuracy of the process.
Conclusion
By applying the weighted-average method, Maple Inc. effectively apportioned costs between completed units and ending inventory, providing clarity for financial reporting and operational analysis. Accurate calculation of equivalent units and unit costs underpins sound managerial decisions and ensures compliance with accounting standards.
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