Question

Mirada Company manufactures handheld calculators and has the following information available for the month of July: Work in process, May 1 (100% complete for July, 25% for conversion) Direct materials Conversion cost $ $ 126,000 units 240,000 394,000 Number of units started 220,000 units July costs Direct materials Conversion cost $ $ 426,000 484,000 Work in process, July 31 (100% complete for materials, 10% for conversion) 144,000 units Required: Using the weighted average method of process costing, complete each of the following steps: 1. Reconcile the number of physical units worked on during the period. Physical Units Physical Units Beginning Units 144,000 126,000 220,000 346,000 Units Completed Ending Units Units Started 12,900 Total Units Total Units 156,900 2. Calculate the number of equivalent units. Equivalent Units Physical Units Direct Materials Conversion Units Completed Ending Inventory Total Units

Answer 1

Answers

[1]

	Physical Units		Physical Units
Beginning Units	126,000	Units completed	202,000
Units Started	220,000	Ending Units	144,000
Total Units	346,000	Total Units	346,000

[2]

		Equivalent Units
	Physical Units	Direct Material	Conversion cost
Units Completed	202,000	202,000	202,000
Ending Inventory	144,000	144,000	14,400 [144000 x 10%]
Total Units	346,000	346,000	216,400

[3]

Working		Material		Conversion
A	Beginning Cost of WIP	$           240,000.00		$         394,000.00
B	Cost added in July	$           426,000.00	Costs	$         484,000.00
C	EUP	346,000	EUP	216,400
D = (A+B)/C	Cost per Equivalent Units	$                 1.92486		$               4.05730

[4]

	Direct material	Conversion cost	Total
Units Completed	$                 388,822 or $ 388820	$        819,575	$            1,208,396 or $ 1208395
Ending Inventory	$                 277,180	$          58,425	$               335,605
Total Cost accounted for	$                 666,002	$        878,000	$            1,544,001

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