Question

Hatch Company produces a product that passes through three processes: Fabrication, Assembly, and Finishing. All manufacturing costs are added uniformly for all processes. The following information was obtained for the Fabrication Department for December:

1. Work in process, June 1, had 90,000 units (40 percent completed) and the following costs:

   Direct materials	$   72,720
   Direct labor	108,000
   Overhead	36,000

2. During the month of June, 180,000 units were completed and transferred to the Assembly Department, and the following costs were added to production:

   Direct materials	$216,000
   Direct labor	144,000
   Overhead	162,000

3. On June 30, there were 45,000 partially completed units in process. These units were 80 percent complete.

Required:

1. Prepare a cost of production report for the Fabrication 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.

Answer 1

Solution:

Production Cost Report - Weighted Average - Fabrication Department
Particulars	Physical Units	Equivalent Units
		Material	Conversion
Units to account for:
Beginning WIP	90000
Started into Production	135000
Total units to account for	225000
Units accounted for:
Unit completed & Transferred out	180000	180000	180000
Ending Work In Proces (80%, 80%)	45000	36000	36000
Equivalent units of production	225000	216000	216000
Costs per equivalent unit	Direct Materials	Conversion	Total Cost
Costs to account for:
Beginning Work In Process	$72,720.00	$144,000.00	$216,720.00
Cost added during the period	$216,000.00	$306,000.00	$522,000.00
Total costs to account for	$288,720.00	$450,000.00	$738,720.00
Divided by : Total EUP	216000	216000
Cost per equivalent unit	$1.34	$2.08
Cost Reconciliation	Direct Materials	Conversion	Total Cost
Units Transferred out during June	$240,600.00	$375,000.00	$615,600.00
Ending work in process: June 30
Material	$48,120.00		$48,120.00
Conversion		$75,000.00	$75,000.00
Total cost of ending WIP June 30	$48,120.00	$75,000.00	$123,120.00
Total costs acccounted for	$288,720.00	$450,000.00	$738,720.00