Question

Product Cost Report–Weighted Average Method Reston Manufacturing Corporation produces a cosmetic product in three consecutive processes. The costs of Department 1 for May 2016 were as follows: Cost of beginning inventory Direct material $24,500 Conversion costs 41,475 Costs added in Department 1 Direct material $738,500 Direct labor 746,375 Manufacturing overhead 507,825 1,992,700 Department 1 handled the following units during May: Page 8 Units in process, May 1 2,000 Units started in Department 1 40,000 Units transferred to Department 2 39,000 Units in process, May 31 3,000 On average, the May 1 units were 30% complete. The May 31 units were 60% complete. Materials are added at the beginning of the process, and conversion costs occur evenly throughout the process in Department 1. Reston uses the weighted average method for process costing.

Answer 1

1) Equivalent unit

		% work done	Direct materials	% work done	Conversion cost
Unit completed and transferred out	39000	100%	39000	100%	39000
Ending inventory	3000	100%	3000	60%	1800
Total units	42000		42000		40800

Production cost report

		Direct material	Conversion Cost
Beginning inventory	65975	24500	41475
Current	2010700	738500	1272200
Total costs account for	2076675	763000	1313675
Total equivalent unit		42000	40800
Average cost	50.3646	18.1667	32.1979
Complete/Transferred
Direct material	708501
Conversion cost	1255718
Cost of goods manufactured	1964219
Ending inventory
Direct material	54500
Conversion cost	57956
Cost of ending inventory	112456
Total cost allocated	2076675