The following partially completed process cost summary describes the July produc

Question

The following partially completed process cost summary describes the July production activities of Ashad Company. Its production output is sent to its warehouse for shipping. All direct materials are added to products when processing begins. Beginning work in process inventory is 20% complete with respect to conversion.

Prepare its process cost summary using the weighted-average method.

Equivalent Units of Production Direct Materials Conversion Units transferred out 39,000 EUP 39,000 EUP Units of ending work in process 3,500 EUP 2,100 EUP Equivalent units of production 42,500 EUP 41,100 EUP

Explanation / Answer

1) Cost charged to production: Beginning work in process $           35,350 Costs icurrred during this period           7,33,300 Total Costs to account for           7,68,650 Total Costs accounted for           7,68,650 Difference due to rounding cost/unit 0 2) Unit Reconcilation: Units to account for: Beginning Work in process                 3,000 Units started during the period               39,500 Total units to account for               42,500 Total units accounted for: Units transferred out               39,000 Units in ending work in process                 3,500 Total units accounted for               42,500 3) Equivalent Units of Production (EUP)- Weighted Average Method Units % Materials EUP- Materials % Conversion EUP- Conversion Units transferred out      39,000 100%                  39,000 100%             39,000 Units in ending work in process         3,500 100%                    3,500 60%               2,100 Total      42,500                  42,500             41,100 4) Cost per EUP Materials Conversion Beginning work in process $           31,450 $             3,900 Costs incured during this period $       4,70,050 $       2,63,250 Total Costs $       5,01,500 $       2,67,150 ÷ Equivalent units of production               42,500               41,100 Cost per equivalent unit of production $             11.80 $               6.50 5) Cost Assignment and Reconciliation Costs transferred out EUP Cost per EUP Total cost Direct Materials               39,000 $                11.80 $       4,60,200 Conversion               39,000 $                  6.50 $       2,53,500 Total transferred out $     7,13,700 Costs of Ending work in process: EUP Cost per EUP Total cost Direct Materials                 3,500 $                11.80 $           41,300 Conversion                 2,100 $                  6.50 $           13,650 Total ending work in process $        54,950 Total costs accounted for $     7,68,650

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