Question

eBook 2. Information about the July inventories follows. Use this information with that from part 1 to prepare a process cost summary, assuming the weighted average method is used. (Round "Cost per EUP" to 2 decimal places.) 12,000 units 15,000 units 9,000 units Units Beginning inventory Started Ending Inventory Beginning inventory Materials-Percent complete Conversion-Percent complete Ending inventory Materials-Percent complete Conversion-Percent complete 100% 80% 100% 40%

Answer 1

Answer-1:

	Account Title and Explanation	Debit $	Credit $
a)	Raw Material Inventory	205,000
	Cash		205,000
	(To record purchase of raw material inventory)
b)	WIP Inventory	58,540
	Factory Overhead	19,000
	Raw Material Inventory		77,540
	(To record raw material used)
c)	WIP Inventory	224,750
	Factory Overhead	34,000
	Factory wages payable		258,750
	(To record factory wages payable)
d)	Factory wages payable	258,750
	Cash		258,750
	(To record payment of factory wages)
e)	Factory overhead	98,000
	Cash		98,000
	(To record additional factory overhead)
f)	WIP Inventory (224,750*50%)	112,375
	Factory overhead		112,375
	(To record factory overhead applied to production)

Answer-2: Units Reconciliation and Equivalent Units of production

		Materials	Coversion
		%	Units	%	Units
Units to account for
Beginning Work in process	12,000
Units started	15,000
Total Units to account for	27,000
Units accounted for
Units transferred	18,000	100%	18,000	100%	18,000
Ending Units of WIP	9,000	100%	9,000	30%	2,700
Total units accounted for	27,000
Equivalent units of production			27,000		20,700

Calculation of Cost per Equivalent Unit

	Materials	Conversion
Cost of beginning work in process	3,560	8,475
Cost added during the production	58,540	337,125
Total Cost	$ 62,100	$ 345,600
Equivalent units of production	27,000	20,700
Cost per Equivalent unit	$ 2.30	$ 16.70

Conversion cost = Direct labor + Overhead applied

Conversion cost = 224,750 + 112,375 = 337,125

	Materials	Conversion	Total
Cost of units transferred out	41,400	300,600	342,000
Cost of ending work in process inventory	20,700	45,090	65,790

Answer-3:

	Account Title and Explanation	Debit $	Credit $
g)	Finished goods inventory	342,000
	Work in process inventory		342,000
	(To total cost transferred to finished goods)
h)	Cash	715,000
	Sales		715,000
	(To record cash sales)
	Cost of goods sold	310,700
	Finished goods inventory		310,700
	(To record cost of goods sold)