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 Units Completed Beginning Units Units Started Ending Units Total Units Total Units 2. Calculate the number of equivalent units. Equivalent Units Physical Units Direct Materials Conversion Units Completed Ending Inventory Total Units 0 0 0

Answer 1

Solution

	Physical units		Physical units
Beginning units	126000	Units completed	202000
Units started	220000	Ending units	144000
Total Units	346000	Total units	346000

.

		Equivalent units
	Physical units	Direct material	Conversion
Units completed	202000	202000	202000
Ending Inventory	144000	144000	14400
Total Units	346000	346000	216400

.

	Direct material	Conversion
Cost per Equivalent units	$         1.92486	$          4.05730

.

	Direct material	Conversion	Total Cost
Units completed	$       3,88,822	$        8,19,575	$      12,08,396
Ending Inventory	$       2,77,180	$            58,425	$        3,35,605
Total Cost Accounted for	$       6,66,002	$        8,78,000	$      15,44,001

Working

Statement of Equivalent Units
				Material		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	2,02,000			100%	2,02,000	100%	2,02,000
Closing WIP	1,44,000			100%	1,44,000	10%	14,400
Total	1,32,000			Total	3,46,000	Total	2,16,400

.

Cost per Equivalent Units
COST		Material	Conversion	TOTAL
Beginning WIP Inventory Cost		$      2,40,000	$    3,94,000	$     6,34,000
Cost incurred during period		$      4,26,000	$    4,84,000	$     9,10,000
Total Cost to be accounted for		$      6,66,000	$    8,78,000	$   15,44,000
Total Equivalent Units		3,46,000	2,16,400
Cost per Equivalent Units		$       1.92486	$      4.05730