Question

T Company makes a product that goes through a single processing department.

Direct Materials are added at the start of the process, while Conversion Costs are added evenly during the process.

T Company uses the Weighted Average method of Process Costing.

During last month, T Company had 10,870 units in beginning Work-in-Process Inventory which were 100% complete for materials and 30% complete for conversion. There were 43,130 units started during the period. After finishing the 10,870 units in beginning Work-in-Process Inventory, the company started and completed 29,100 units. (That means the total units transferred to Finished Goods for the period was 10,870 + 29,100 = 39,970 units.) T Company had 14,030 units in ending Work-in-Process Inventory which were 100% complete for materials and 60% complete for conversion. The beginning Work-in-Process Inventory had a value of $127,355 (which was $105,895 of materials and $21,460 of conversion).

During the month, costs added were $998,383 (which was $366,605 of materials and $631,778 of conversion).

Prepare a Cost of Production Report using the Weighted Average Method and FIFO.

With the Weighted Average Method:

(a) Calculate the dollar cost of items transferred out of Work-in-Process Inventory and into Finished Goods Inventory for the month using the Weighted Average method of Process Costing.

(b) Calculate the dollar cost of items in Ending Inventory (at the end of the month) using the Weighted Average method of Process Costing.

With the FIFO Method:

(c) Calculate the dollar cost of items transferred out of Work-in-Process Inventory and into Finished Goods Inventory for the month using the FIFO method of Process Costing.

(d) Calculate the dollar cost of items in Ending Inventory (at the end of the month) using the FIFO method of Process Costing.

What additional information is needed? I have it completed with this same information but want to be sure it is correct.

Answer 1

Weighted average

		Material	Conversion
Units to account for
Beginning Work in process	10870
Units started	43130
Total Units to account for	54000
Units accounted for
Units transferred	39970	39970	39970
Equivalent units in ending WIP	14030	14030	8418
Total units accounted for	54000
Equivalent units of production		54000	48388
	Material	Conversion
Cost of beginning work in process	$    105,895	$        21,460
Cost added during the production	$    366,605	$      631,778
Total Cost	$    472,500	$      653,238
Equivalent units of production	54000	48388
Cost per Equivalent unit	$           8.75	$           13.50
	Material	Conversion	Total
Ending Work in process inventory
Equivalent units	14030	8418
Cost per Equivalent unit	$           8.75	$           13.50
Cost of Ending Work in process inventory	$    122,763	$      113,643	$      236,406
Units completed and transferred out
Units transferred	39970	39970
Cost per Equivalent unit	$           8.75	$           13.50
Cost of Units transferred	$    349,738	$      539,595	$      889,333
Costs to be accounted for
Cost of beginning work in process	$    127,355
Cost added during production	$    998,383
Total Costs to be accounted for	$1,125,738
Costs accounted for as follows
Cost of Ending work in process	$    236,406
Cost of Units transferred	$    889,333
Total Costs accounted for	$1,125,738

FIFO

		Material	Conversion Costs
Units to account for
Beginning Work in process	10870
Units started	43130
Total Units to account for	54000
Units accounted for
Inventory in Process, Beginning	10870	0	7609
Started and completed	29100	29100	29100
Units transferred	39970	29100	36709
Equivalent units in ending WIP	14030	14030	8418
Total units accounted for	54000
Equivalent units of production		43130	45127
	Material	Conversion Costs
Cost added during the production	$    366,605	$      631,778
Equivalent units of production	43130	45127
Cost per Equivalent unit	$           8.50	$           14.00
	Material	Conversion Costs	Total
Inventory in Process, Beginning			$      127,355
Costs incurred			$      998,383
Total Costs to be accounted for			$ 1,125,738
Costs allocated
Inventory in Process, Beginning			$      127,355
To completed beginning inventory	$                -	$      106,526	$      106,526
Total Cost of Work in Process			$      233,881
Started and completed	$    247,350	$      407,400	$      654,750
Transferred to Packing Department			$      888,631
Inventory in Process, Ending	$    119,255	$      117,852	$      237,107
Total Costs accounted for			$ 1,125,738