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In its Department R, Recyclers, Inc., processes donated scrap cloth into towels for sale in local...

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Accounting

In its Department R, Recyclers, Inc., processes donated scrapcloth into towels for sale in local thrift shops. It sells theproducts at cost. The direct materials costs are zero, but theoperation requires the use of direct labor and overhead. Thecompany uses a process costing system and tracks the processingvolume and costs incurred in each period. At the start of thecurrent period, 500 towels were in process and were 60 percentcomplete. The costs incurred were $176.

During the month, costs of $20,150 were incurred, 3,100 towelswere started, and 250 towels were still in process at the end ofthe month. At the end of the month, the towels were 20 percentcomplete.

Required:

a. Prepare a production cost report: thecompany uses FIFO process costing. (Round "Cost perequivalent unit" to 2 decimal places.)

b. Show the flow of costs through T-accounts.Assume that current period conversion costs are credited to variouspayables.

Answer & Explanation Solved by verified expert
4.1 Ratings (483 Votes)
Physcial units Conversion Work in Process Beginning 500 Started during the period 3100 To account for 3600 Work in Process Beginning 500 200 Units started and completed 2850 2850 Units transferred to next department 3350 3050 Ending Work in Process 250 50 Accounted for    See Answer
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