Question

3. (9 points) Anchor Inc. uses the weighted average method in its pr System. The following data concern the operations of the compani processing department for a recent month. hted-average method in its process costing oncern the operations of the company's first Work in process, beginning: Units in process... 5,000 Costs in the beginning inventory: Materials cost.... Conversion cost....... $281,250 $50,000 Units started into production during the month... Units completed and transferred out... 130,000 110,000 Costs added to production during the month: Materials cost. Conversion cost........ $500,000 $400,000 Work in process, ending: Units in process.... % of completion with respect to materials.. % of completion with respect to conversion... 25,000 60% 40% 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

• Requirement

>Element of Production Cost report

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	110,000	100%	110,000	100%	110,000
Units of ENDING WIP	25,000	60%	15,000	40%	10,000
Equivalent Units of Production			125,000		120,000
COST per EUP			Material		Conversion
Cost of Beginning WIP			$        281,250.00		$                                  50,000.00
Cost incurred during the period			$        500,000.00		$                                400,000.00
Total Costs		Costs	$        781,250.00	Costs	$                                450,000.00
Equivalent units of production		EUP	125,000	EUP	120,000
Cost per EUP			$              6.25000		$                                      3.75000

Total Cost to account for:
Cost of beginning WIP	$                    331,250.00
Costs incurred this period	$                    900,000.00
Total Cost to account for	$                1,231,250.00
Total costs accounted for	$                1,231,250.00
Difference due to rounding cost/unit	$                                      -
Units Reconciliation
Units to account for:
Beginning WIP	5,000
Units started this period	130,000
Total Units to account for	135,000
Total Units accounted for:
Completed & Transferred out	110,000
Ending WIP	25,000
Total Units accounted for	135,000

TOTAL COST ACCOUNTED FOR
Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	110,000	$                      6.25	$        687,500.00
- Conversion	110,000	$                      3.75	$        412,500.00
Total Cost transferred Out				$        1,100,000.00
Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	15,000	$                      6.25	$          93,750.00
- Conversion	10,000	$                      3.75	$          37,500.00
Total cost of ending WIP				$            131,250.00
Total costs accounted for					$                            1,231,250.00