Question

Moravia Company processes and packages cream cheese. The following data have been compiled for the month of April. Conversion activity occurs uniformly throughout the production process.

Work in process, April 1—13,000 units:
Direct material: 100% complete, cost of	$	20,000
Conversion: 25% complete, cost of		3,500
Balance in work in process, April 1	$	23,500
Units started during April		112,000
Units completed during April and transferred out to finished-goods inventory		85,000
Work in process, April 30:
Direct material: 100% complete
Conversion: 35% complete
Costs incurred during April:
Direct material	$	230,000
Conversion costs:
Direct labor	$	46,200
Applied manufacturing overhead		84,940
Total conversion costs	$	131,140

Prepare schedules to accomplish each of the following process-costing steps for the month of April. Use the weighted-average method of process costing.

Required:

1. Analysis of physical flow of units.

2. Calculation of equivalent units.

3. Computation of unit costs. (Round "Cost per Equivalent Unit" to 2 decimal places.)

Answer 1

Units in Ending WIP = Units in Beginning WIP +Units started - Units completed and transferred
= 13000 + 112000 - 85000 = 40000 units

1.

Physical Flow Schedule
Units to account for
Beginning WIP		13000
Units started		112000
Total Units to account for		125000
Units accounted for
Units completed and transferred out
Beginning WIP	13000
Units started	72000	85000
Ending WIP		40000
Total Units accounted for		125000

2. Equivalent units of Production = Units completed and transferred + Ending WIP x Completion
Material = 85000 + 40000 x 100% = 125000 units
Conversion = 85000 + 40000 x 35% = 99000 units

3. Cost per equivalent unit = (Beginning Cost + Cost added) / Equivalent units
Material = ($20000 + $230000) / 125000 = $2 per unit
Conversion = ($23500 + $131140) / 99000 = $1.56 per unit

Total Cost per unit = $3.56 per unit