Question

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Problem 16-4A Weighted average: Process cost summary, equivalent units, cost estimates LO C2, C3, P4

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Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 22,200 units of product to finished goods inventory. Its 3,000 units of beginning work in process consisted of $19,800 of direct materials and $221,940 of conversion costs. It has 2,400 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $496,800 of direct material costs and $2,165,940 of conversion costs were charged to production.

Problem 16-4A Part 1

1. Prepare the company’s process cost summary for May using the weighted-average method.

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Part 1)

94 Part 3) Tamar Co. Production Cost Report For the Period Ended May Equivalent units of Material and Conversion Cost 99 Particulars Physical Units Material Conversion Cost 100 Units completed and transferred out 22200 22200 22200 101 (22200*100%) (22200*100%) 102 Units in ending inventory 2400 2400 1920 (2400*100%) (2400*80%) 104 Equivalent units 24600 24600 24120 703 105 107 Statement for calculation of unit cost Material Conversion Cost Unit Cost 708 109 Cost in beginning work in process 110 Cost incurred during the period 111 Total cost to be accounted for 112 Equivalent units 113 Equivalent cost per unit 19800 496800 516600 24600 21.00 221940 2165940 2387880 24120 99.00 120.000

А 14 241740 2662740 2904480 15 Cost to account for 16 Beginning inventory 17 Incurred during the period 118 Total cost to be accounted 19 20 Cost accounted for 21 Units completed and transferred out (120*22200) 22 Units in ending inventory cost 23 Direct Material (2400*21) 24 Conversion Cost (1920*99) 25 Total cost accounted for 26 27 For any help please comment in the comment box 20 2664000 50400) 190080 240480 2904480