Question

P3-6A Hamilton Processing Company uses a weighted-average process cost system and manufáctures a single product-an industrial carpet shampoo and cleaner used by many universities. The manufacturing activity for the month of October has just been com- pleted. A partially completed production cost report for the month of October for the Mixing and Cooking Department is shown on page 130. Instructions (a) Prepare a schedule that shows how the equivalent units were computed so that you can complete the "Quantities: Units accounted for" equivalent units section shown in the production cost report, and compute October unit costs. (b) Complete the "Cost Reconciliation Schedule" part of the production cost report.

Answer 1

		HAMILTON PROCESSING COMPANY
		Production cost report
		Mixing and Cooking Department
		Summery of Physical units and equivalent units calculation
		Units to be accounted for	Physical units
		Units in the beginning WIP inventory(70% conversion,Material 100%)	20000
		Units started during the period	150000
		Total units to be accounted for	170000
				Equivalent units
		Units accounted for	Physical unit	Material	Conversion
		Units completed and transferred out	120000	120000	120000
		Units in ending WIP inventory(60% material,40% conversion)	50000	30000	20000
		Total units accounted for	170000	150000	140000
		Summery of costs to be accounted for
		Costs to be accounted for	Materials	Conversion	Total
		Total costs to be accounted for	$240,000	$105,000	$345,000
		Calculation of costs per equivalent unit
			Materials	Conversion	Total
		Total costs to be accounted for(a)	$240,000	$105,000	$345,000
		Total equivalent units accounted for(b)	150000	140000
		Cost per equivalent unit(a)/(b)	$1.60	$0.75	$2.35
		Assign costs to units transferred out and in Ending WIP
			Materials	Conversion	Total
		Costs assigned to units transferred out	$192,000	$90,000	$282,000
		Cost assigned to ending WIP	$48,000	$15,000	$63,000
					$345,000
		Cost Reconciliation Schedule
		Cost Accounted for
		Transferred out			$282,000
		Cost assigned to ending WIP
		Material		$48,000
		Conversion Costs		$15,000	$63,000
		Total Costs			$345,000