Question

Problem 5: Process Costing (Part 1-15 points: Part 2-3 points each: total points 36) Acklac Corporation uses the weighted-average method in its process c0sting system. This month, the beginning inventory in the first processing department consisted of 700 units. The costs and percentage completion of these units in beginning inventory were: Percent Complete Cost Materials costs 65% $12,000 $2,000 Conversion costs 10% A total of 9,200 units were started and 8,300 units were transferred to the second processing department during the month. The following costs were incurred the first processing department during the month: Materials costs $200,800 $225,500 Conversion costs The ending inventory was 75 % complete with respect to materials and 15 % complete with respect to conversion costs Note: Round all unit data to cents (two decimals) and all totals to full dollars (no cents). Part 1(15 points) Prepare a complete schedule (as shown in class) for the allocation of costs and answer questions 2-7 For Part #1 --Show work on the following page (a clean sheet is provided!) Part 2: (3 points each, 21 points total) Now, answer each of the following and place your answers in the appropriate space below What are the equivalent units for conversion costs for the month in the first processing department? А. What are the equivalent units for materials for the month in the first processing department? В. What is the total cost to allocate for the month in the first processing department? What is the cost per equivalent unit for materials? What is the cost per equivalent unit for conversion cost? How much cost should be allocated to units transferred out? F. How much costs should be allocated to ending inventory in this department? Answers Part 2: BCDEG

Answer 1

Answer

• All working forms part of the answer
• Workings

Units Reconciliation
Units to account for:
Beginning WIP	700
Units started this period	9,200
Total Units to account for	9,900
Total Units accounted for:
Completed & Transferred out	8,300
Ending WIP	1,600
Total Units accounted for	9,900

• Requirement A

EUP - Weighted Average Method	Units	% Conversion	EUP - Conversion
Units TRANSFERRED	8,300	100%	8,300
Units of ENDING WIP	1,600	15%	240
Equivalent Units of Production			8,540

• Requirement B

EUP - Weighted Average Method	Units	% Material	EUP Materials
Units TRANSFERRED	8,300	100%	8,300
Units of ENDING WIP	1,600	75%	1,200
Equivalent Units of Production			9,500

• Requirement C

Total Cost to account for:
Cost of beginning WIP	$                      14,000.00
Costs incurred this period	$                    426,300.00
Total Cost to account for	$                    440,300.00

• Requirement D

COST per EUP	Material
Cost of Beginning WIP	$          12,000.00
Cost incurred during the period	$        200,800.00
Total Costs	$        212,800.00
Equivalent units of production	9,500
Cost per EUP	$            22.40000

• Requirement E

COST per EUP	Conversion
Cost of Beginning WIP	$                                    2,000.00
Cost incurred during the period	$                                225,500.00
Total Costs	$                                227,500.00
Equivalent units of production	8,540
Cost per EUP	$                                   26.63934

• Requirement F

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	8,300	$                    22.40	$        185,920.00
- Conversion	8,300	$                    26.64	$        221,112.00
Total Cost transferred Out				$            407,032.00

• Requirement G

Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	1,200	$                    22.40	$          26,880.00
- Conversion	240	$                    26.64	$             6,393.60
Total cost of ending WIP				$              33,273.60