Question

E4-3A. Equivalent Units and Product Cost Report—Weighted Average Method In its first month’s operations (January 2019), Schramski Company’s Department 1 incurred charges of $120,000 for direct materials (10,000 units), $29,875 for direct labor, and $58,000 for manufacturing overhead. At month-end, 9,000 units had been finished and transferred out. The remaining units were finished with respect to material but only 25% complete with respect to conversion costs.

Assuming Schramski uses the weighted average method and that materials are added at the beginning of the process and conversion costs occur evenly, compute the following:

a.) The equivalent units of materials and conversion costs.

b.) The cost per equivalent unit of materials and conversion costs.

c.) the total cost assigned to the units transferred out

d.) the total cost of assigned to the ending inventory

Schramski Company Department 1 Flow of Units and Equivalent Units Calculation January 2019 Production Where do the units come from? Where do the units go? % Work Done? Equivalent Units Direct % Work Materials Done? Conversion Costs Beginning Inventory Started Total Complete/Transferred Ending Inventory Total a. a Product Cost Report Where do the costs come from? Direct Materials Conversion Costs Beginning Inventory Current Total Costs to Account For $ | = Total Equivalent Units 0 01 Average cost / Equivalent unit Where do the costs go? Complete / Transferred: Direct Materials Conversion costs Cost of Goods Manufactured Ending Inventory Direct Materials Conversion costs Cost of Ending Inventory Total Costs Allocated d. $

Answer 1

250 10 A B E F G H 1 Schramski Company 2 Flow of Units and Equivalent units Calculation 3 January 2019 Production 4 Equivalent Units Direct % Work Conversion 5 Where do the units come from? Where do the units go? % Work done Materials Done Costs 6 Beginning inventory Complete/Transferred 9,000 100% 9000 100% 9000 7 Started 10,000 Ending inventory b. 1,000 100% 1000 25% 8 10,000 Total 10,000 a. 10000 a. 9250 9 Production Cost Report Direct Conversion Where do the costs come from? Total Materials Costs 11 Beginning inventory $ $ 0 12 Current $ 207,875 $ 120,000 87875 13 Total costs to account for $ 207,875 $ 120,000 $ 87,875 14 Total equivalent units b. 10,000 b. 9250 15 Average cost / Equivalent unit 22 $ 12.00 $ 9.50 16 17 Where do the costs go? 18 Complete/Transferred 19 Direct materials 108,000 20 Conversion costs 85,500 21 Cost of goods manufactured 193,500 C. 22 Ending inventory 23 Direct Materials 12,000 24 Conversion costs 2,375 25 Cost of Ending Inventory 14,375 d. 26 Total Costs Allocated 207,875

А B D F G H 1 E Schramski Company Flow of Units and Equivalent units Calculation January 2019 Production 2 3 4 Equivalent Units 5 Where do the units come from? Where do the units go? % Work done Direct Materials % Work Done Conversion Costs 6 Beginning inventory 0 Complete/Transferred 9000 1 =+D6*E6 1 =+F6*G6 7 Started 10000 Ending inventory b. =+D8-D6 1 =+D7*E7 0.25 =+F7*G7 8 =+B6+B7 Total =+B8 a. =+F6+F7 a. =+H6+H7 9 Production Cost Report Direct Materials 0 Conversion Costs 0 120000 =+F11+F12 b. =+F8 =+F13/F14 =29875+58000 =+H11+H12 b. =+H8 =+H13/H14 Where do the costs come from? Total 10 11 Beginning inventory =+F11+H11 12 Current =+F12+H12 13 Total costs to account for =+B11+B12 14 Total equivalent units 15 Average cost / Equivalent unit -+F15+H15 16 17 Where do the costs go? 18 Complete/Transferred 19 Direct materials =#F6*F15:F15 20 Conversion costs =+H6 H15 21 Cost of goods manufactured =+B19+B20 22 Ending inventory 23 Direct Materials =+F7*F15 24 Conversion costs =+H7*H15 25 Cost of Ending Inventory =+B23+B24 26 Total Costs Allocated =+B21+B25 C. d.