Question

Required information The Foundational 15 (LO4-1, LO4-2, LO4-3, L04-4, L04-5] [The following information applies to the questions displayed below.] Clopack Company manufactures one product that goes through one processing department called Mixing. All raw materials are introduced at the start of work in the Mixing Department. The company uses the weighted average method of process costing. Its Work in Process T-account for the Mixing Department for June follows (all forthcoming questions pertain to June): June 1 balance Work in Process-Mixing Department 40,000 Completed and transferred to Finished Goods 128, 325 84,500 102,000 Materials Direct labor Overhead June 30 balance The June 1 work in process inventory consisted of 5,500 units with $21,750 in materials cost and $18,250 in conversion cost. The June 1 work in process inventory was 100% complete with respect to materials and 60% complete with respect to conversion. During June, 38,000 units were started into production. The June 30 work in process inventory consisted of 9,000 units that were 100% complete with respect to materials and 50% complete with respect to conversion.

Answer 1

WN-1

Statement of Equivalent Production

Materials CC**     

Particulars	Quantity	Quantity	%	Quantity	%
1.Output (FG)*	34500	34500	100	34500	100
2.Closing WIP	9000	9000	100	9000×50%=4500	50
3.Equivalent Production(1+2)	43500	43500		39000

Here OH means Overheads,FG means Finished Goods.

*Output=Opening WIP+Material Added-Closing WIP

=5500u+38000u-9000u=34500u

CC** means conversion, which is labor and overhead.

WN-2

Statement of Cost per Equivalent unit

Particulars	Material	Conversion Cost(Labor+Overhead)
1.Cost	128325	186500(84500+102000)
2.Opening WIP	21750	18250
3.Total	150075	204750
4.Equivalent Production units(from WN-1)	43500	39000
5.Cost per Equivalent unit($)[3÷4]	3.45	5.25

Total Cost per unit = $(3.45+5.25)=$8.7

(8)Cost per Equivalent unit for materials(from WN-2) =$3.45

(9)Cost per Equivalent unit for Conversion (from WN-2)=$5.25

The below calculations are done on the basis of WN-1,WN-2

(10)Cost of ending work in progress inventory =9000u×$3.45=$31050

(11)Cost of ending work in progress for conversion = 4500u×$5.25=$23625

(12) Cost of materials transferred to Finished goods = 34500u×$8.7=$300150