Question

UJ Lyuld Aurantium, Inc. uses a process costing system. The following operating and cost data occurred during October (10 Points) October 1, Inventory: d e las October 31, Inventory: 30,000 units 100% complete for materials ($60,000) and 50% complete for direct labor ($7,500) and overhead ($15,000) 20,000 units 100% complete for materials and 30% complete for direct labor and overhead 40,000 units Direct materials........... Direct labor......................... Overhead.. Units started during Oct.: October production costs: $110,100 28,900 57,800 Materials are added at the beginning of the process. Direct labor and overhead are incurred evenly throughout e process. Prepare the October process cost summary using weighted average method of inventory costing.

Answer 1

Solution:

Computation of Equivalent unit of Production
Particulars	Physical Units	Material	Conversion
Units to account for:
Beginning WIP	30000
Started into Production	40000
Total units to account for	70000
Units accounted for:
Unit completed & Transferred out	50000	50000	50000
Units in ending inventory:	20000
Material (100%)		20000
Conversion (30%)			6000
Equivalent units of production	70000	70000	56000

Computation of Cost per equivalent unit
Particulars	Material	Conversion	Total
Opening WIP	$60,000	$22,500	$82,500
Cost Added during Period	$110,100	$86,700	$196,800
Total cost to be accounted for	$170,100	$109,200	$279,300
Equivalent units of production	70000	56000
Cost per Equivalent unit	$2.43	$1.95

Computation of Cost of ending WIP and units completed & transferred out
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	20000	6000
Cost per equivalent unit	$2.43	$1.95
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$48,600	$11,700	$60,300
Units completed and transferred	50000	50000
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$121,500	$97,500	$219,000

Cost reconciliation
Particulars	Amount
Costs to be accounted for:
Cost of beginning WIP inventory	$82,500.00
Cost added to production	$196,800.00
Total Costs to be accounted for	$279,300.00
Costs accounted for as follows:
Cost of unit transferred out	$219,000
Ending WIP:
Material	$48,600
Converison	$11,700
Total Ending WIP	$60,300
Total costs accounted for	$279,300