Question

Rowen, Inc. adds direct materials at the beginning of the process, while conversion costs are incurred uniformly throughout the process. At the beginning of the period, Work in Process Inventory was 50% complete. At the end of the period, Work in Process Inventory was 60% complete. Rowen, Inc. started the following production report Required: Fill in the missing amounts. (Round your "Cost per Equivalent Unit" answers to 2 decimal places.) ROWEN, INC. Process Costing Production Report (Weighted Average Method) UNITS Step 1: Units to be Accounted for: Physical Units Beginning Work in Process Started into Production 12,000 Total Units Step 2 Equivalent Units Units Accounted for as Follows: Materials Conversion Completed and Transferred 15,000 Ending Work in Process Total Units 18,000 COSTS $ Cost of Beginning Inventory Current Period Costs Total Cost of Units in Process Equivalent Units Cost per Equivalent Unit Step 3: Cost per Equivalent Unit Materials Conversion Total Cost 54,000 $ 42,000 $ 96,000 122,500 210,000 322,500 166,500 S 252,000 $ 418,500 $ $ Cost to be Accounted for: Beginning Work in Process Current Period Costs Total Costs Step 4: Reconcile Work in Process Materials Conversion Total Cost 54,000 S 42,000 112.500 210,000 322,500 166,500 S 252,000 $ 418,500 $ Cost Accounted for as Follows: Units Completed and Transferred Ending Inventory $ 166,500 S 252,000 $ 418,500

Answer 1

ROWEN, INC. Process Costing Production Report (Weighted Average Method) Units Reconciliation: Step-1: Units to be accounted for: Physical Units Beginning work in process 6,000 Units added during the process 12,000 Step-2: Total units to account for 18,000 Equivalent Units Total units accounted for: Materials Conversion Units completed and transferred out 15,000 15,000 15,000 Ending work in process 3,000 3,000 1,800 Total units accounted for 18,000 18,000 16,800 COSTS: Cost per equivalent units of production Beginning work in process Current Period Costs Total Costs of Units in Process Equivalent units of Production (EUP) Cost per Equivalent Unit Step-3: Cost per Equivalent Unit Materials Conversion Total cost $54,000 $42,000 $96,000 $122,500 $210,000 $332,500 $166,500 $252,000 $418,500 18,000 16,800 $9.25 $15.00 $24.25

Total costs to account for: Beginning work in process Current Period Costs Total Costs Step-4: Reconcile Work in Process Materials Conversion Total cost $54,000 $42,000 $96,000 $122,500 $210,000 $332,500 $166,500 $252,000 $418,500 Total costs to account for: Units Completed and Transferred Ending Inventory Total Costs $138,750 $225,000 $27,750 $27,000 $166,500 $252,000 $363,750 $54,750 $418,500 Workings: Under weighted average method, equivalent units are to be calculated only for units completed & transferred out and units lying as ending work in process as it is assumed that the units once entered into the process become integral part of total units and no segregation between units transferred from beginning work in process and introduced during current process. Conversion cost includes Labor + Overheads. So, % of completion of beginning Work in Process Inventory doesn't affect the calculation of equivalent units of production.

Total units to account for Add: Units started into production current period Units in beginnig work in process 18,000 -12,000 6,000 Total units accounted for Number of completed and transferred out Units in ending work in process 18,000 -15,000 3,000 Particulars Physical Units % Materials EUP- Materials % EUP- Conversion Conversion Completed and transferred Ending work in process Equivalent Units of Production (EUP) 15,000 3,000 18,000 100% 100% 15,000 3,000 18,000 100% 60% 15,000 [15000 units x 100%; 15000 units x 100%] 1,800 [3000 units x 100%; 3000 units x 60%] 16,800 NOTE: As materials are added at the beginning of the process itself, percentage of completion for materials is 100% in ending inventory. Cost per equivalent units of production Cost of beginning work in process Cost added during the period Total Costs Equivalent units of Production (EUP) Cost per Equivalent units of Production Materials Conversion $54,000 $42,000 $122,500 $210,000 $166,500 $252,000 18,000 16,800 $9.25 $15.00 Total Cost $96,000 $332,500 (Materials as calculated above] $418,500 [As computed EUP schedule presented above] $24.25 ($166500 / 18000 units = $9.25; $252000 / 16800 units = $15; $9.25 +$15 = $24.25]

Cost per Cost of goods completed and transferred out EUP Totals Materials Conversion Total Cost of goods completed and transferred out 15,000 15,000 EUP $9.25 $15.00 $138,750 [15000 units x $9.25] $225,000 (15000 units x $15.00] $363,750 Cost per Cost of ending work in process EUP Totals Materials Conversion Total Cost of ending work in process 3,000 1,800 EUP $9.25 $15.00 $27,750 [3000 units x $9.25] $27,000 [1800 units x $15.00] $54,750