Tamar Co. manufactures a single product in one department. All direct materials
ID: 2417496 • Letter: T
Question
Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 22,200 units of product to finished goods inventory. Its 3,000 units of beginning work in process consisted of $19,800 of direct materials and $221,940 of conversion costs. It has 2,400 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $496,800 of direct material costs and $2,165,940 of conversion costs were charged to production.
Prepare the company’s process cost summary for May using the weighted-average method
Explanation / Answer
Materials Conversion
Transferred 22,200 22,200
Ending WIP 2,400 1,920
total equivalent units 24,600 24,120
Beginning WIP cost 19,800 221,940
Added during the year 496,800 2,165,940
total cost 516,600 2,387,880
Cost per unit $21 $99
cost Summary
Beginning WIP $241,740
Added during the year 2,662,740
total costs $2,904,480
cost accounted for
Transferred out 2,664,000
Ending WIP 240,480
total cost $2,904,480
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