Question

Beginning work in process Units started Units completed Ending work in process Spoilage 17,500 units 67,500 units 64,000 units 17,500 units 3,500 units Beginning work in process direct materials Beginning work in process conversion Direct materials added during month Total costs incurred during month $14,875 $2,450 $63,325 $94,400 Beginning work in process was half complete as to conversion. Direct materials are added at the beginning of the process. Factory overhead is applied at a rate equal to 70% of direct manufacturing labour. Ending work in process was 40% complete. All spoilage is normal and is detected at end of the process. Required: Prepare a production cost worksheet assuming that spoilage is recognized and the weighted average method is used.

Answer 1

Statement of Equivalent Units						Equivalent Units
						Materials		Conversion
Particulars		Units	Particulars		Units	%	Units	%	Units
Beginning WIP		17500	Normal Loss		3500	-	-	-	-
Units Started		67500	Units completed		64000	100%	64000	100%	64000
			Ending WIP		17500	100%	17500	40%	7000
		85000			85000		81500		71000

Statement of Evaluation
				Cost per
		Total Cost	Eq. Units	eq. units
Materials		$ 78,200.00	81500	$      0.96
Conversion		$ 33,525.00	71000	$      0.47

Total cost to account for
Materials		($ 14875 + $ 63325)		$ 78,200.00
Conversion		($ 2450 + $ 31075)		$ 33,525.00
					$ 111,725.00
Total cost accounted for
Cost of Units completed and transferred
			Cost per
		Eq. Units	eq. units	Cost
Materials		64000	$      0.96	$ 61,408.59
Conversion		64000	$      0.47	$ 30,219.72
					$   91,628.31
Cost of ending WIP
			Cost per
		Eq. Units	eq. units	Cost
Materials		17500	$      0.96	$ 16,791.41
Conversion		7000	$      0.47	$   3,305.28
					$   20,096.69
					$ 111,725.00