Question

Weighted Average Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment

Mimasca Inc. manufactures various holiday masks. Each mask is shaped from a piece of rubber in the molding department. The masks are then transferred to the finishing department, where they are painted and have elastic bands attached. Mimasca uses the weighted average method. In May, the molding department reported the following data:

1. BWIP consisted of 15,000 units, 20% complete. Cost in beginning inventory totaled $1,656.
2. Costs added to production during the month were $26,094.
3. At the end of the month, 45,000 units were transferred out to Finishing. Then, 5,000 units remained in EWIP, 25% complete.

Required:

1. Prepare a physical flow schedule.

Mimasca Inc.
Physical Flow Schedule
For the Month of May
Units to account for:
Units in beginning WIP
Units started
Total
Units accounted for:
Transferred out
Units in ending WIP
Total

2. Calculate equivalent units of production.
equivalent units

3. Compute unit cost. Round your answer to the nearest cent.
$per unit

4. Calculate the cost of goods transferred to Finishing at the end of the month. Calculate the cost of ending inventory.

Cost transferred out	$
Cost of ending work in process	$

5. Conceptual Connection: Assume that the masks are inspected at the end of the molding process. Of the 45,000 units inspected, 2,500 are rejected as faulty and are discarded. Thus, only 42,500 units are transferred to the finishing department. The manager of Mimasca considers all such spoilage as abnormal and does not want to assign any of this cost to the 42,500 good units produced and transferred to finishing. Your task is to determine the cost of this spoilage of 2,500 units.
$

2. PR.06.62

eBook

Weighted Average Method, Single-Department Analysis

Millie Company produces a product that passes through an assembly process and a finishing process. All manufacturing costs are added uniformly for both processes. The following information was obtained for the assembly department for June:

a. WIP, June 1, had 24,000 units (60% completed) and the following costs:

Direct materials	$186,256
Direct labor	64,864
Overhead applied	34,400

b. During June, 70,000 units were completed and transferred to the finishing department, and the following costs were added to production:

Direct materials	$267,880
Direct labor	253,000
Overhead applied	117,600

c. On June 30, there were 10,000 partially completed units in process. These units were 70% complete.

Required:

Prepare a production report for the assembly department for June using the weighted average method of costing. The report should disclose the physical flow of units, equivalent units, and unit costs and should track the disposition of manufacturing costs.

Millie Company
Assembly Department Production Report
For the Month of June (Weighted Average Method)
Unit Information
Units to account for:
Units in beginning WIP
Units started
Total units to account for
Units accounted for:
	Units
Units completed
Units in ending WIP
Total units accounted for
Equivalent units:	Units
Units completed
Units in ending WIP
Total equivalent units
Cost Information
Costs to account for:
	Dollars
Costs in beginning WIP	$
Costs added by department
Total costs to account for	$
Cost per equivalent unit	$
Costs accounted for:
Goods transferred out	$
Ending WIP
Total costs accounted for	$

Answer 1

1 Mimasca Inc. Physical flow schedule For the Month of May Units to account for: Units in beginning WIP Units Started Total Units To Account for Total Units accounted for Transferred out Units in Ending WIP Inventory Total Units Accounted for 15,000 35,000 (50,000-15,000) 50,000 45,000 5,000 50,000 2 Equivalent units 46,250 3 Cost per Equivalent unit $0.60 per EUP 4 Cost transferred out Cost of ending work in process $27,000 $750 5 Cost of Spoilage units $1,500 (2,500*$0.60) Working notes: Equivalent Units of Production - Weighted average method % Units Completion Equivalent Units 45,000 1,250 46,250 Transferred out 45,000 100% Units in Ending WIP Inventory 5,000 25% Total units 50,000 Cost per equivalent unit of production Cost from Beginning WIP Inventory Current Period Costs Total cost Costs Equivalent units of production EUP Cost per equivalent unit of production ( rounded to 2 decimal places) $1,656 $26,094 $27,750 46,250 $0.60 Costs allocated to completed and partially completed units: Units completed and transferred out Inventory in process, Ending Total costs assigned $27,000 45,000* $0.60 $750 1,250*$0.60 $27,750

Millie Company Assembly Department Production Report For the Month of June (Weighted Average Method) Unit Information Units to account for: Units Units in beginning WIP 24,000 Units started 56,000 Total units to account for 80,000 Units accounted for: Units Units completed 70,000 Units in ending WIP 10,000 Total units accounted for 80,000 % Equivalent units: Units Completion Units completed 70,000 100% Units in ending WIP 10,000 70% Total equivalent units 80,000 Cost Information Costs to account for: Equivalent Units 70,000 7,000 77,000 $285,520 $638,480 $924,000 $12.00 Costs in beginning WIP Costs added by department Total costs to account for Cost per equivalent unit Costs accounted for: Goods transferred out Ending WIP Total costs accounted for $840,000 70,000*$12 $84,000 7,000*$12 $924,000