Question

Naples operates a retail store and has two service departmen ts

Harbor Manufacturing Company uses a process cost accounting system. Materials are added at the beginning of the process. Direct labor and overhead are added evenly throughout the process. The company uses monthly reporting periods for its weighted average process cost accounting. The following are the operating and cost data information for October. The October 1 beginning Goods in Process Inventory consisted of 20,000 units. The costs for this inventory are $82,500 of direct materials, $24,400 of direct labor, and $48,800 of factory overhead. Factory overhead is applied at 200% of direct labor cost. In addition to the beginning inventory costs, the company issued the following costs into Goods in Process Inventory; direct materials, $240,000; direct labor, $68,000; factory overhead, $136,000. During October, the company completed and transferred 60,000 units of its product to finished goods. At the end of the month, the goods in process inventory consisted of 15,000 units that were 40% complete with respect to direct labor and factory overhead and 100% complete with respect to materials. Prepare the company's process cost summary for October using the weighted average method.

Answer 1

		Equivalent Units
	Physical	Direct	Direct	Factory
Quantities	Units	Materials	Labor	OH
Units to be
accounted for
WIP, Oct 1	20000
Started into	55000
production
Total Units	75000
Units accounted
for
Transferred Out	60000	60000	60000	60000
WIP, Oct 31	15000	15000	6000	6000
Total Units	75000	75000	66000	66000

	Direct	Direct	Factory
Costs	Materials	Labor	OH	Total
Unit Costs
Total Costs	$ 322,500.00	$   92,400.00	$ 184,800.00	$ 599,700.00
Equivalent Units	75000	66000	66000
Unit Costs	$             4.30	$             1.40	$             2.80	$              8.50
Costs to be
accounted for
WIP, Oct 1	$   82,500.00	$   24,400.00	$   48,800.00	$ 155,700.00
Started into	$ 240,000.00	$   68,000.00	$ 136,000.00	$ 444,000.00
production
Total				$ 599,700.00
Costs accounted
for
Transferred Out	(W.N.1)			$ 510,000.00
WIP, Oct 31	(W.N. 2)			$    89,700.00
Total				$ 599,700.00

W.N.1
Cost of units transferred out
	Units	Cost/unit	Costs
Materials	60000	$      4.30	$ 258,000.00
Conversion	60000	$      1.40	$    84,000.00
Factory OH	60000	$      2.80	$ 168,000.00
			$ 510,000.00

W.N.2
Cost of Closing WIP
	Units	Cost/unit	Costs
Materials	15000	$      4.30	$    64,500.00
Conversion	6000	$      1.40	$      8,400.00
Factory OH	6000	$      2.80	$    16,800.00
			$   89,700.00