Question

Weighted Average Method, Journal Entries Muskoge Company uses a process-costing system. The company manufactures a product that is processed in two departments: Molding and Assembly. In the Molding Department, direct materials are added at the beginning of the process; in the Assembly Department, additional direct materials are added at the end of the process. In both departments, conversion costs are incurred uniformly throughout the process. As work is completed, it is transferred out. The following table summarizes the production activity and costs for February: Molding Assembly Beginning inventories: Physical units 10,000 8,000 Costs: Transferred in $45,300 Direct materials $22,000 Conversion costs $13,800 $20,450 Current production: Units started 25,000 Units transferred out 30,000 35,000 Costs: Transferred in Direct materials $56,400 $40,250 Conversion costs $106,900 $140,150 Percentage of completion: Beginning inventory 40% 50% Ending inventory 80 50

Answer 1

b)	Equivalent Units of Production (EUP) - Weighted Average Method
					Units	% Mat.	EUP- Mat.	% Conv.	EUP- Conv.
	Units completed and transferred out				30000	100%	30000	100%	30000
	Units in ending inventory				5000	100%	5000	80%	4000
	Equivalent units of production						35000		34000

c)	Cost per Equivalent Unit of Production
						Materials		Conversion	Total
	Beginning costs					$      22,000.00		$    13,800.00
	During the month costs					$      56,400.00		$ 1,06,900.00
	Total cost				Costs	$      78,400.00	Costs	$ 1,20,700.00
	÷	Equivalent units of production			EUP	35000	EUP	34000
	Cost per equivalent unit of production					$                2.24		$              3.55	$              5.79

d)	Cost Assignment
	Cost of units transferred out				EUP	Cost/ EUP	Total Cost
	Direct Materials				30000	$      2.24	$      67,200.00
	Conversion				30000	$      3.55	$   1,06,500.00
	Total costs transferred out						$   1,73,700.00
	Cost of ending work in process				EUP	Cost/ EUP	Total Cost
	Direct Materials				5000	$      2.24	$      11,200.00
	Conversion				4000	$      3.55	$      14,200.00
	Total cost of ending work in process						$      25,400.00

e)	Costs to account for:
	Beginning WIP			35,800.00
	Costs incurred			1,63,300.00
	Total costs to account for			1,99,100.00
	Costs accounted for:
	Transferred out			$ 1,73,700.00
	Ending WIP			$    25,400.00
	Total costs accounted for			$ 1,99,100.00