Question

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The following partially completed process cost summary describes the July production activities of Ashad Company. Its production output is sent to its warehouse for shipping. All direct materials are added to products when processing begins. Beginning work in process inventory is 20% complete with respect to conversion.

Equivalent Units of Production	Direct Materials			Conversion
Units transferred out		32,500	EUP		32,500	EUP
Units of ending work in process		3,000	EUP		1,800	EUP
Equivalent units of production		35,500	EUP		34,300	EUP

Costs per EUP	Direct Materials				Conversion
Costs of beginning work in process		$	22,950			$	2,600
Costs incurred this period			349,800				175,760
Total costs		$	372,750			$	178,360

Units in beginning work in process (all completed during July)	2,500
Units started this period	33,000
Units completed and transferred out	32,500
Units in ending work in process	3,000

Prepare its process cost summary using the weighted-average method. (Round "Cost per EUP" to 2 decimal places.)

Answer 1

Ashad Company
Production Cost Report : Weighted Average Method
Month Ended July
Step 1 - Summary of physical units and equivalent units of production
Units to be accounted for	Physical Units
Units in beginning WIP inventory	2500
Units started during July	33000
Total Units to be accounted for	35500
		Equivalent Units
Units accounted for	Physical Units	Direct Materials	Conversion
Units completed and transferred out	32500	32500	32500
Units in ending WIP Inventory	3000	3000	1800
Total Units accounted for	35500	35500	34300
Step 2 : Summary of costs to be accounted for
Costs to be accounted for	Direct Materials	Conversion	Total
Costs in beginning WIP Inventory	$22,950.00	$2,600.00	$25,550.00
Costs incurred during July	$349,800.00	$175,760.00	$525,560.00
Total costs to be accounted for	$372,750.00	$178,360.00	$551,110.00
Step 3 - Calculation of cost per equivalent unit
	Direct Materials	Conversion	Total
Total costs to be accounted for	$372,750.00	$178,360.00
Total equivalent units accounted for	35500	34300
Cost per equivalent unit	$10.50	$5.20	$15.70
Step 4 : Assign costs to units transferred out and units in ending WIP Inventory
	Direct Materials	Conversion	Total
Costs assigned to units transferred out	$341,250.00	$169,000.00	$510,250.00
Costs assigned to units in ending WIP Inventory	$31,500.00	$9,360.00	$40,860.00
Total costs accounted for			$551,110.00