Question

Fast Co. produces its product through a single processing department. Direct materials are added at the start of production, and conversion costs are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing system. The Work in Process Inventory account has a balance of $95,500 as of October 1, which consists of $20,100 of direct materials and $75,400 of conversion costs. During the month the company incurred the following costs: Direct materials Conversion $ 192,650 1,040,600 5 During October, the company started 150,000 units and transferred 160,000 units to finished goods. At the end of the month, the work in process inventory consisted of 25,000 units that were 80% complete with respect to conversion costs. Required: 1. Prepare the company's process cost summary for October using the weighted average method. 2. Prepare the journal entry dated October 31 to transfer the cost of the completed units to finished goods inventory. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the company's process cost summary for October using the weighted average method. (Round "Cost per EUP" to 2 decimal places.)

Answer 1

1.

1 Weighted Average Method-Equivalent production Costs charged to production: Cost of Beginning WIP Cost added to production during the period Total Cost to be accounted for: Total costs accountred for *Difference due to rounding cost/unit $ 95,500 $ 1,233,250 $ 1,328,750 $ 1,328,750 0 Unit Reconcilation Beginning Work in Process Inventory, Started this period Cost Charged to account for: Completed and Transferred out Ending Work in Process Inventory, Total units accounted for: 35,000 150,000 185,000 160,000 25,000 185,000 Equivalent units of production a. %Conversion EUP -Conversion 100% % of Material 100% 100% Completed and Transferred out Ending WIP Total UNITS 160,000 Units 160,000 25,000 185,000 EUP-Material 160,000 25,000 185,000 80% 20,000 180,000

b. Cost per Equivalent unit of production Beginning WIP Started Total Costs Div, Equivalent units Cost per Equivalent unit of production 35,000 150,000 185,000 EUP-Material $ 20,100 $ 192,650 $ 212,750 185,000 $ 1.15 EUP -Conversion $ 75,400 $ 1,040,600 $ 1,116,000 180,000 $ 6.20 $ Costs Costs EUP EUP 7.35 C. Total costs accounted for: Cost of units transferred out: Direct Material Conversion cost EUP Cost per EUP Total costs 160,000 $ 1.15$ 184,000 160,000 $ 6.20 $ 992,000 $ 1,176,000 d. Cost of Ending WIP: Direct Material Conversion cost EUP Cost per EUP Total costs 25,000 $ 1.15$ 28,750 20,000 $ 6.20 $ 124,000 $ $ 152,750 1,328,750 Total costs accounted for e. Cost Reconcilation Costs to be accounted for: Cost of beginning WIP Cost added to production during the period Total Cost to be accounted for: Costs accounted for as follow: Costs of units transferred out Cost of Ending WIP Total Cost to be accounted for: $ 95,500 $ 1,233,250 $ 1,328,750 ($20,100+$75,400) ($192,650+1,040,600) $ 1,176,000 $ 152,750 $ 1,328,750

2.

Credit Journal Entries Date Particulars Debit Oct.31 Finished Goods Inventory $ 1,176,000 Work in process Inventory (To record transfer of goods completed) $ 1,176,000

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*Weighted-Average Method:
*It calculates the equiavlent-unit cost of the work done to date and assigns this cost to equiavlent units
completed and transferred out of the process and to equivalent units in ending WIP inventory.
*The weighted-average cost is the total of all costs entering WIP account divided by total equivalent units
of work done to date.
*Equivalent units in Beginning WIP + Equivalent units of work done in current period = Equivalent units completed and transferred out in current period + Equivalent units in Ending WIP.
*Cost per Equivalent unit of production = Cost of beginning WIP + Started = Total Costs divided by Equivalent units.

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