Question

LIM Unit 4 Process Costing Steps in Determining the Weighted Average Costs for Process Costing 1. Recap Costs 2. Determine the physical flow of units - how many physical units did you work on? 3. Determine EUP 1. For materials (always at 100%) 2. For conversion costs (direct labor and overhead) 4. Determine the unit cost 1. For materials 2. For conversion costs 3. And total 5. Allocate the costs incurred to goods 1. Finished and not finished 6. Reconcile ending balance of WIP Dept 1 Resources Problem 1

Answer 1

1. Recap Cost:

Recap Cost	Material	Conversion	Total
Beginning of the month	$13,500	$8,000	$21,500
This month	$75,000	$169,000	244,000
Total	$88,500	$177,000	$265,500

2. Account for units - Determining the physical flow

Particulars	Amount	Particulars	Amount
Opening WIP	$3,500	Completed During the Year	$16,500
Started during the year	$17,500	Closing WIP	$4,500
To account for	$21,000	To account for	$21,000

3. Calculation of Equivalent Units:

Particulars	units	%	Materials	%	Conversion Cost
Completed during the year	16,500	100%	16,500	100%	16,500
Closing WIP	4,500	100%	4,500	60%	2,700
Equivalent units			21,000		19,200

4.Determination of cost per unit:

Particulars	Material	Conversion Cost	Total
Beginnning cost	13,500	8,000	21,500
Additions during the year	75,000	169,000	244,000
Total Cost	88,500	177,000	265,500
Equivalent units	21,000	19,200
Equivalent unit of producion	4.21	9.22	13.43

5. Allocation of cost

Assignment of costs	units	per unit	Total
Finished	16,500	13.43	$221,645

Journal Entry to transfer work in process cost from Dept A to Dept B

For Material = Work in progress A/c Dr 18,964

To Raw Materia A/c Cr 18,964

For Overheads = Work in progress A/c Dr $24,891

To manufacturing overhead A/c Cr $24,891

6.Determination of cost of ending WIP Inventory

Particulars	EUP	Cost per EUP	Total
Direct Material	4,500	$4.21	$18,964
Conversion cost	2,700	$9.22	$24,891
Total cost of closing WIP			$43,855