Question

Show all supporting computations! 1. Chase Inc. uses the weighted average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: Cost $6,000 $9.900 Percent Complete 50% Materials costs........ .. Conversion costs.............. 30% A total of 9,200 units were started and 8,200 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Materials costs.................. Conversion costs................ $113,900 S322,500 The ending inventory was 80% complete with respect to materials and 20% complete with respect to conversion costs. Required (7 Points): Using the weighted average method: a. Determine the equivalent units of production for materials and conversion costs. b. Determine the cost per equivalent unit for materials and conversion costs, and the total product cost per equivalent unit. c. Determine the cost of units transferred out of the department during the month. d. Determine the cost of ending work in process inventory in the department

Answer 1

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Chase Inc. Cost of Production Report
For the Period Ended		Equivalent Units
Unit information	Physical Units	Materials	Conversion
Units charged to production:
Opening Inventory in process	800.00
Units started during the period	9,200.00				Note B
Total units accounted for	10,000.00				Started and completed in the same period
					Goods finished in the period	8,200.00
Units to be assigned costs:					Less: Opening work in process	800.00
Opening Inventory in process	800.00	800.00	800.00		Started and completed in the same period	7,400.00
Started and completed in the same period	7,400.00	7,400.00	7,400.00	See note B
Goods transferred out in the period	8,200.00	8,200.00	8,200.00
Closing Inventory in process	1,800.00	1,440.00	360.00	This is closing units multiplied by % of completion
Total units to be assigned costs:	10,000.00	9,640.00	8,560.00		This is answer a.
Cost Information				Total
Costs in the beginning inventory		6,000.00	9,900.00	15,900.00
Costs added to production during the month		113,900.00	322,500.00	436,400.00
Total costs incurred		119,900.00	332,400.00	452,300.00
Cost per equivalent unit		12.44	38.83	51.27	This is answer b.
Costs allocated to completed and partially completed units
To complete opening inventory in process		9,950.21	31,065.42	41,015.63
Started and completed in the same period		92,039.42	287,355.14	379,394.56
Cost of the units transferred to the next department				420,410.19	This is answer c.
Closing Inventory in process		17,910.37	13,979.44	31,889.81	This is answer d.

Gibson Corporation	Journal Entries
Event	Account	Debit $	Credit $
1	Work in Process- Mixing Department	50,872.00
	Raw material control		50,872.00
2.a	Direct Labor	42,962.00
	Wages Payable		42,962.00
2.b	Work in Process- Mixing Department	42,962.00
	Direct Labor		42,962.00
3	Work in Process- Mixing Department	59,471.00
	Manufacturing Overhead		59,471.00
4	Work in Process- Drying Department	128,992.00
	Work in Process- Mixing Department		128,992.00
5	Finished Goods control	117,717.00
	Work in Process- Drying Department		117,717.00
6.a	Cost of goods sold	108,915.00
	Finished Goods control		108,915.00
6.b	Accounts Receivable	149,750.00
	Sales		149,750.00