Question

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Fast Co. produces its product through two processing departments. Direct materials are added at the start of production in the Cutting department, and conversion costs are added evenly throughout each process. The company uses monthly reporting periods for its weighted average process costing system. The Work in Process Inventory-Cutting account has a balance of $84,300 as of October 1, which consists of $17,100 of direct materials and $67,200 of conversion costs. points During the month, the Cutting department incurred the following costs: Skipped Direct materials Conversion $144,400 862,400 eBook Print At the beginning of the month, 30,000 units were in process. During October, the company started 140,000 units and transferred 150,000 units to the Assembly department. At the end of the month, the Cutting department's work in process inventory consisted of 20,000 units that were 80% complete with respect to conversion costs. References Required: 1. Prepare the Cutting department's process cost summary for October using the weighted average method. 2. Prepare the journal entry dated October 31 to transfer the cost of the partially completed units to Assembly. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the Cutting department's process cost summary for October using the weighted average method. (Round "Cost per El decimal places.) Total costs to account for: Screenshot

Answer 1

Solution:

Physical Units Count

Under this method the percentage completion done in the Beginning Inventory is ignored while calculating the equivalent completed units during the current period. Beginning Inventory Units are treated as fresh units introduced for production.

Cost Accounted for:

- The cost of opening work-in-progress and cost of the current period are aggregated and the aggregate cost is divided by output in terms of completed equivalent units.

- The units of Beginning Inventory of WIP and their cost are taken in full under this method

Total Costs to account for:	Total Cost
Cost of Beginning Work IN Process	$84,300
Cost added during the period ($144,400 + 862,400)	$1,006,800
Total Costs to account for:	$1,091,100
Total costs accounted for	$1,091,100
Difference due to rounding cost/unit	$0
Unit reconciliation:
Units to account for:
beginning work in process	30000
Units started during period	140000
Total units to account for	170000
Total units accounted for:
Units completed and transferred	150000
Ending work in process	20000
Total units accounted for:	170000

Equivalent units of production (EUP) - weighted average method
	Units	% materials	EUP - materials	% conversion	EUP - conversion
Units completed and transferred	150000	100%	150000	100%	150000
Ending work in process	20000	100%	20000	80%	16000
Total units	170000		170000		166000
Cost per equivalent unit of production (rounded to 2 decimals)			Materials		Conversion
Beginning work in process			$17,100		$67,200
Cost added during the period			$144,400		$862,400
Total Costs		Costs	$161,500	Costs	$929,600
Equivalent Units of Production			170000		166000
Cost per equivalent unit of production			$0.95		$5.60
Total costs accounted for:	EUP	Cost per EUP	Total Cost
Cost of units transferred out:
Direct materials	150,000	$0.95	$142,500
Conversion	150,000	$5.60	$840,000
Total Cost transferred out			$982,500
Costs of ending work in process
Direct materials	20,000	$0.95	$19,000
Conversion	16,000	$5.60	$89,600
Total cost of ending work in process			$108,600
Total costs accounted for:			$1,091,100

Journal Entry

Date	general journal	Debit	Credit
Oct.31	Partially Completed Units Transferred to Assembly Department (Work in Process - Assembly Department)	$982,500
	Work in Process - Cutting Department		$982,500
	(To transfer units from cutting to assembly department)

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