Question

Problem 20-3A Weighted Average: Process cost summary: equivalent units LO C2, C3, P4 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 $106,300 as of October 1, which consists of $23,700 of direct materials and $82,600 of conversion costs. During the month the company incurred the following costs: Direct materials Conversion $ 169,150 During October, the company started 162,000 units and transferred 172,000 units to finished goods. At the end of the month, the work in process inventory consisted of 31.000 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.

Answer 1

А $ 106,300 $ 1,109,910 $ 1,216,210 $ 1,216, 210 1 Total costs to account for 2 Costs of beginning work in process 3 Costs incurred this period 4 Total costs to account for 5 Total costs accounted for 6 *Difference due to rounding cost/unit 8 Unit reconciliation 9 Units to account for 10 Beginning work in process inventory - units 11 Units started this period 12 Total units to account for 13 Total units accounted for 14 Units Completed and transferred out 15 Ending work in process - Units 16 Total units accounted for 41000 162,000 203,000 172,000 31,000 203,000 18 Equivalent units of production (EUP)- weighted average method 19 Units % Materials EUP-Materials % Conversion EUP-Conversion 20 Units completed and transferred out 172,000 100% $ 172,000 100% $ 172,000 21 Units of ending goods in process 31,000 100% $ 31,000 80% $ 24,800 22 Equivalent units of production 203,000 $ 203,000 196,800 23 Cost per equivalent unit of production Materials Conversion 24 Cost of beginning goods in process $ 23,700 82,600 25 Costs incurred this period $ 169,150 $ 940,760 26 Total costs Costs $ 192,850 Costs $ 1,023,360 27 - Equivalent units of production EUP 203,000 EUP 196,800 28 Cost per equivalent unit of production 0.95 $ 5.20

29 EUP Cost per EUP Total cost 172,000 $ 0.95 $ 163,400 172,000 $ 5.20 $ 894,400 $ 1,057,800 30 Total costs accounted for 31 Cost of units transferred out 32 Direct materials 33 Conversion 34 Total costs transferred out 35 Costs of ending work in process 36 Direct materials 37 Conversion 38 Total cost of ending work in process 39 Total costs accounted for in 1 EUP Cost per EUP Total cost 31,000 $ 0.95$ 29,450 24,800 $ 5.20 $ 128,960 $ $ 158,410 1,216, 210

1 Total costs to account for 2 Costs of beginning work in process 3 Costs incurred this period 4 Total costs to account for 5 Total costs accounted for 6 *Difference due to rounding cost/unit 106300 =169150+940760 =+B2+B3 =+E39 =+B4-B5 8 Unit reconciliation 9 Units to account for 10 Beginning work in process inventory - 11 Units started this period 12 Total units to account for 13 Total units accounted for 14 Units Completed and transferred out 15 Ending work in process - Units 16 Total units accounted for =172000+31000-162000 162000 =+B10+B11 172000 31000 =+B14+B15 18 Equivalent units of production (EUP)- weig 19 Units 20 Units completed and transferred out =+B14 21 Units of ending goods in process =+B15 22 Equivalent units of production =+B20+B21 23 Cost per equivalent unit of production 24 Cost of beginning goods in process 25 Costs incurred this period 26 Total costs 27 - Equivalent units of production 28 Cost per equivalent unit of production % Materials EUP- Materials % Conversion EUP-Conversion =+B20*C20 =+B20*E20 =+B21*C21 0.8 =+B21*E21 =+D20+D21 =+F20+F21 Materials Conversion 23700 82600 169150 940760 =+D24+D25 Costs =+F24+F25 EUP =+D22 S+F22 =+D26/D27 =+F26/F27

29 EUP =+D20 =+F20 Cost per EUP Total cost =+D28 =+B32*C32 =+F28 =+B33*C33 =+D32+D33 30 Total costs accounted for 31 Cost of units transferred out 32 Direct materials 33 Conversion 34 Total costs transferred out 35 Costs of ending work in process 36 Direct materials 37 Conversion 38 Total cost of ending work in process 39 Total costs accounted for EUP =+021 Cost per EUP Total cost =+D28 =+B36*C36 =+F28 =+B37*C37 =+F21 =+D36+D37 =+E34+E38

Credit Debit $ 1,057,800 Date Account Titles and Explanation Oct-31 Finished goods inventory Work in process inventory (To record the transfer of goods to finished goods inventory) $ 1,057,800