Otylia Manufacturing Company Assembles Its Product in Several Departments Required:
Prepare a Production Cost Worksheet Using Weighted-Average for the Two

question 113

Essay

Otylia Manufacturing Company assembles its product in several departments.It has two departments that process all units.During February,the beginning work in process in the cutting department was half completed as to conversion,and complete as to direct materials.The beginning inventory included $12,000 for materials and $3,000 for conversion costs.Ending work-in-process inventory in the cutting department was 40% complete.Direct materials are added at the beginning of the process.
Beginning work in process in the finishing department was 75% complete as to conversion.Beginning inventories included $16,000 for transferred-in costs and $20,000 for conversion costs.Ending inventory was 25% complete.Additional information about the two departments follows:
$$\begin{array} { | l | r | r | } \hline & { \text { Cutting } } & \text { Finishing } \\\hline \text { Beginning work-in-process units } & 20,000 & 20,000 \\\hline \text { Units started this period } & 40,000 & 50,000 \\\hline \text { Units transferred this period } & 50,000 & \\\hline \text { Ending work-in-process units } & 10,000 & 20,000 \\\hline \text { Material costs added } & \$ 42,000 & \$ 28,000 \\\hline \text { Direct manufacturing labor } & \$ 18,700 & \$ 40,000 \\\hline \text { Other conversioncosts } & \$ 21,500 & \$ 24,000 \\\hline\end{array}$$ Required:
Prepare a production cost worksheet using weighted-average for the cutting department.

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Definitions:

Conventional CVP Analysis

A method used in managerial accounting to understand the relationship between costs, production volume, and profits. It stands for Cost-Volume-Profit Analysis.

Contribution Margin

The amount of revenue remaining after deducting variable costs, used to cover fixed costs and generate profit.

Variable Cost

Expenses that vary directly with the level of production output or sales volume, such as raw materials and direct labor costs.

Sales Revenue

Income earned from the sale of goods or services, representing the primary source of income for businesses involved in retail or wholesale trade.