Question

Exercise 16-20 Weighted average: Process cost summary Oc3 Hi-Test Company uses the weighted-average method of process costing to assign production costs to its products. Information for the company's first production process for September follows. Assume that all materials are added at the beginning of this production process, and that conversion costs are added uniformly throughout the process. $101,320 Work in process inventory, September 1 (2,000 units, 100% complete with respect to direct materials, 80% complete with respect to direct labor and overhead; consists of $45,000 of direct materials cost and $56,320 conversion cost) Costs incurred in September Direct materials Conversion Work in process inventory, September 30 (7,000 units, 100% complete with respect to direct materials, 40% complete with respect to conversion) Units started in September Units completed and transferred to finished goods inventory $375,000 $341,000 $ ? 28,000 23,000 Compute each of the following using the weighted average method of process costing. 1. The number of equivalent units for materials for the month. 2. The number of equivalent units for conversion for the month. 3. The cost per equivalent unit of materials for the month. 4. The cost per equivalent unit for conversion for the month. 5. The total cost of goods transferred out. 6. The total cost of ending work in process inventory.

Answer 1

D E F А B с 1 1) Equivalent units -Materials 30,000 2 2) Equivalent units -Conversion 25,800 3 3) Cost per equiavlent unit-Materials $ 14.00 4 4) Cost per equiavlent unit-Conversion $ 15.40 5 5) Total cost of goods transferred out $ 676,200 6 6) Total cost of ending work in process $ 141,120 7 8 Equivalent units of production (EUP)- weighted average method 9 Units % Materials EUP-Materials % Conversion EUP-Conversion 10 Units completed and transferred out 23,000 100% $ 23,000 100% $ 23,000 11 Units of ending goods in process 7,000 100% $ 7,000 40% $ 2,800 12 Equivalent units of production $ 30,000 $ 25,800 13 Cost per equivalent unit of production Materials Conversion 14 Cost of beginning goods in process $ 45,000 $ 56,320 15 Costs incurred this period $ 375,000 $ 341,000 16 Total costs Costs $ 420,000 Costs $ 397,320 17 - Equivalent units of production EUP 30,000 EUP 25,800 18 Cost per equivalent unit of production $ 14.00 $ 15.40 19 20 Total costs accounted for 21 Cost of units transferred out EUP Cost per EUP Total cost 22 Direct materials 23,000 $ 14.00 $ 322,000 23 Conversion 23,000 $ 15.40 $ 354,200 24 Total costs transferred out $ 676,200 25 Costs of ending work in process EUP Cost per EUP Total cost 26 Direct materials 7,000 $ 14.00 $ 98,000 27 Conversion 2,800 $ 15.40 $ 43, 120 28 Total cost of ending work in process $ 141,120 29 Total costs accounted for $ 817,320

B D E A с F 1 1) Equivalent units -Materials =+D12 2 2) Equivalent units -Conversion =+F12 3 3) Cost per equiavlent unit-Materials =+D18 4 4) Cost per equiavlent unit-Conversion =+F18 5 5) Total cost of goods transferred out =+E24 6 6) Total cost of ending work in process =+E28 7 8 Equivalent units of production (EUP)- wei 9 Units % Materials EUP-Materials % Conversion EUP-Conversion 10 Units completed and transferred out 23000 1 =+B10*C10 1 =+B10*E10 11 Units of ending goods in process 7000 1 =+B11*c11 0.4 =+B11*E11 12 Equivalent units of production =+D10+D11 =+F10+F11 13 Cost per equivalent unit of production Materials Conversion 14 Cost of beginning goods in process 45000 56320 15 Costs incurred this period 375000 341000 16 Total costs Costs =+D14+D15 Costs =+F14+F15 17 - Equivalent units of production EUP =+D12 EUP =+F12 18 Cost per equivalent unit of production =+D16/D17 =+F16/F17 19 20 Total costs accounted for 21 Cost of units transferred out EUP Cost per EUP Total cost 22 Direct materials =+D10 +D18 =+B22*C22 23 Conversion =+F10 =+F18 =+B23*C23 24 Total costs transferred out =+D22+D23 25 Costs of ending work in process EUP Cost per EUP Total cost 26 Direct materials =+D11 =+D18 =+B26*C26 27 Conversion =+F11 =+F18 =+B27*C27 28 Total cost of ending work in process =+D26+D27 29 Total costs accounted for =+E24+E28