Question

3. (9 points) Anchor Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month. Work in process, beginning: Units in process...... 5,000 Costs in the beginning inventory: Materials cost............. Conversion cost. $281.250 $50,000 130.000 Units started into production during the month ........... Units completed and transferred out..... 110,000 Costs added to production during the month: Materials cost..... Conversion cost. S500.000 $400,000 Work in process, ending: Units in process 9 of completion with respect to materials.................. % of completion with respect to conversion.......... 25,000 6096 409 Required: Prepare a process costing departmental production report (calculation of equivalent units, cost per equivalent unit, and cost reconciliation) for the department using the weighted average method. Round the cost per unit to the nearest cent

Answer 1

Production Cost report

	Whole unit	Direct material	Conversion	Total
Units to be accounted for
Beginning WIP	5000
Unit started	130000
Total units to be accounted for	135000
Units accounted as
Unit transferred out	110000	110000	110000
Ending WIP	25000	25000*60% = 15000	10000
Total Units accounted as	135000	125000	120000
Cost per unit		Direct material	Conversion	Total
Beginning WIP		281250	50000	331250
Cost added		500000	400000	900000
Total Cost		781250	450000	1231250
Equivalent unit		125000	120000
Cost per equivalent unit		6.25	3.75	10
Cost reconciliation
Cost of unit transferred out	EUP	Cost per unit	Total Cost
Direct material	110000	6.25	687500
Conversion	110000	3.75	412500
Total Cost of unit transferred out				1100000
Cost of ending WIP	EUP	Cost per unit	Total Cost
Direct material	15000	6.25	93750
Conversion	10000	3.75	37500
Total cost of ending WIP				131250
Total Cost				1231250