Question

Saddleback Company makes camping lanterns using a single production process. All direct materials are added at the beginning of the manufacturing process. Information for the month of March follows: Costs $ 184,000 336,000 520,000 $ Units Beginning work in process (30% complete) 126,800 Direct materials Conversion cost Total cost of beginning work in process Number of units started 235,000 Number of units completed and transferred to 221 00 finished goods Ending work in process (65% complete) Current period costs Direct materials Conversion cost Total current period costs $ 499,400 640,000 $1,139,400 Required: 1. Using the weighted-average method of process costing, complete each of the following steps: a. Reconcile the number of physical units worked on during the period. b. Calculate the number of equivalent units. c. Calculate the cost per equivalent unit. d. Reconcile the total cost of work in process.

Answer 1

Solution

Reconciliation of Units
A	Opening WIP	1,26,800
B	Introduced	2,35,000
C=A+B	TOTAL	3,61,800
D	Transferred	3,34,000
E=C-D	Closing WIP	27,800

.

	Material	Conversion
Equivalent Units of Production	3,61,800	3,52,070

.

	Material	Conversion
Cost per equivalent Unit	$                    1.89	$                   2.77

.

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 520,000
Cost incurred during period	$ 1,139,400
Total cost to be accounted for	$ 1,659,400
Costs accounted for as follows:
Cost of Units Transferred Out	$ 1,556,796
Cost of Ending Wip	$ 102,604
Total cost accounted for	$ 1,659,400

Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	3,34,000			100%	3,34,000	100%	3,34,000
Closing WIP	27,800			100%	27,800	65%	18,070
Total	3,61,800			Total	3,61,800	Total	3,52,070

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 184,000	$ 336,000	$ 520,000
Cost incurred during period		$ 499,400	$ 640,000	$ 1,139,400
Total Cost to be accounted for		$ 683,400	$ 976,000	$ 1,659,400
Total Equivalent Units		3,61,800	3,52,070
Cost per Equivalent Units		$                   1.89	$                     2.77	$                4.66

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 1.89	27,800	$          52,511.11	3,34,000	$ 630,889
Conversion cost	$ 2.77	18,070	$          50,093.22	3,34,000	$      9,25,906.78
TOTAL	$ 1,659,400	TOTAL	$ 102,604	TOTAL	$ 1,556,796