Triangle Fastener Corporation accumulates costs for its single product using pro

Question

Triangle Fastener Corporation accumulates costs for its single product using process costing. Direct material is added at the beginning of the production process, and conversion activity occurs uniformly throughout the process. A partially completed production report for the month of May follows.

Production Report
For the Month of May

Problem 4-28 Part 1

Required

1. Complete each of the following process-costing steps using the weighted-average method:

a. Calculation of equivalent units.

b. Computation of unit costs.

c. Analysis of total costs.

  

Production Report
For the Month of May

Physical Units Percentage of
Completion with Respect to Conversion Equivalent Units Direct Material Conversion Work in process, May 1 30,000 39 % Units started during May 45,000 Total units to account for 75,000 Units completed and transferred out during May 42,000 42,000 42,000 Work in process, May 31 33,000 68 % 33,000 22,440 Total units accounted for 75,000

Explanation / Answer

a) Equivalent unit of material = 42000+(33000*100%) = 75000

Equivalent unit of conversion = 42000+(33000*68%) = 64440

b) Compute unit cost :

Material = 363750/75000 = 4.85

Conversion = 3083454/64440 = 47.85

c) Analysis of total cost :

Cost of units transferred out = (4.85+47.85)*42000 = $2213400

Cost of ending work in process = (4.85*33000+47.85*22440) = $1233804

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