In a single process production system, Decent Co produces wool gloves. For November 2020, the
company’s accounting records reflected the following :
Beginning WIP Inventory (100% complete as to material;
40% complete as to direct labor; 60% complete as to overhead) 12,000 units
Units started during the month 90,000 units
Ending WIP Inventory (100% complete as to material;
40% complete as to direct labor; 80% complete as to overhead) 20,000 units
Cost component November 1 During November
Direct material Rs. 13,020 Rs. 146,100
Direct labor 1,908 45,792
Overhead 4,636 70,824
Required:
1. For November , prepare a cost of production report assuming that the company uses the
weighted average method.
2. Would the weighted average costing method result into true costing of products. Explain with
cogent reasons.
Extracted text: Q. 1.b. In a single process production system, Decent Co produces wool gloves. For November 2020, the company's accounting records reflected the following : Beginning WIP Inventory (100% complete as to material; 40% complete as to direct labor; 60% complete as to overhead) Units started during the month Ending WIP Inventory (100% complete as to material; 40% complete as to direct labor; 80% complete as to overhead) 12,000 units 90,000 units 20,000 units Cost component November 1 During November Direct material Rs. 13,020 Rs. 146,100 Direct labor 1,908 45,792 Overhead 4,636 70,824 Required: 1. For November , prepare a cost of production report assuming that the company uses the weighted average method. 2. Would the weighted average costing method result into true costing of products. Explain with cogent reasons.