Question

Product Cost Report—Weighted Average Method

Reston Manufacturing Corporation produces a cosmetic product in three consecutive processes. The costs of Department 1 for May 2016 were as follows:

Cost of beginning inventory
Direct material		$29,400
Conversion costs		49,770
Costs added in Department 1
Direct material	$886,200
Direct labor	895,650
Manufacturing overhead	609,390	2,391,240

Department 1 handled the following units during May:

Units in process, May 1	2,000
Units started in Department 1	40,000
Units transferred to Department 2	39,000
Units in process, May 31	3,000

On average, the May 1 units were 30% complete. The May 31 units were 60% complete. Materials are added at the beginning of the process, and conversion costs occur evenly throughout the process in Department 1. Reston uses the weighted average method for process costing.

Required

Prepare the product cost report for Department 1 for May.

Round average cost per equivalent unit to four decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number.

Reston Manufacturing Corporation Department 1 Flow of Units and Equivalent Units Calculations, May 2016
		Equivalent Units
		% Work Done	Direct Materials	% Work Done	Conversion Costs
Complete/Transferred	Answer	Answer	Answer	Answer	Answer
Ending Inventory	Answer	Answer	Answer	Answer	Answer
Total	Answer		Answer		Answer

Product Cost Report
			Direct Materials		Conversion Costs
Beginning Inventory	Answer		Answer		Answer
Current	Answer		Answer		Answer
Total Costs to Account For	Answer		Answer		Answer
÷ Total Equivalent Units			Answer		Answer
Average cost / Equivalent unit (round four decimal places)			Answer		Answer
Complete / Transferred:
Direct Materials	Answer
Conversion costs	Answer
Cost of Goods Manufactured	Answer
Ending Inventory:
Direct Materials	Answer
Conversion costs	Answer
Cost of Ending Inventory	Answer
Total Costs Allocated	Answer

Answer 1

Solution

Reston Manufacturing Corporation Department 1
Flow of Units and Equivalent Units Calculations, May 2016
		Equivalent Units
		% Work	Direct	% Work	Conversion
		Done	Materials	Done	Costs
Complete/Transferred	39000	100%	39000	100%	39000
Ending Inventory	3000	100%	3000	60%	1800
Total	42000		42000		40800

.

Product Cost Report
		Direct	Conversion
		Materials	Costs
Beginning Inventory	$       79,170.00	$      29,400.00	$       49,770.00
Current	$ 23,91,240.00	$   8,86,200.00	$   15,05,040.00
Total Costs to Account For	$ 24,70,410.00	$   9,15,600.00	$   15,54,810.00
÷ Total Equivalent Units		42000	40800
Average cost / Equivalent unit (round four decimal places)		$         21.8000	$          38.1081
Complete / Transferred:
Direct Materials	$        8,50,200
Conversion costs	$       14,86,216
Cost of Goods Manufactured	$       23,36,416
Ending Inventory:
Direct Materials	$           65,400
Conversion costs	$           68,595
Cost of Ending Inventory	$        1,33,995
Total Costs Allocated	$       24,70,410