Direct materials are added at the start of the process. Conversion costs are add
ID: 2421800 • Letter: D
Question
Direct materials are added at the start of the process. Conversion costs are added evenly during the process. We use the weighted average-method of process costing. The following information for March 2013 is available.
Work in process, Mar. 1: 10,000 units (70% converted)
Started during March: 40,000 units
Completed and transferred during March: 34,000 units
**Ending working in process is 50% converted as direct labor and overhead**
Total costs for March:
Working in process beginning:
Direct Materials $60,000
Direct Labor: $50,000
Overhead Applied: $20,000
direct materials added during March: $280,000
Direct labor added during March: $265,000
Overhead applied during March: $106,000
***Questions***
1. Calculate cost per unit for materials, labor and overhead.
2. Prepare the journal entries for the costs used in work in process plus the cost transferred from work-in-process to finished goods.
3. If the actual manufacturing overhead was $100,000 during March what is the balance in manufacturing overhead at March 31, 2013.
4. What is the journal entry to account for the over or under-applied overhead?
5. What is the March 31, 2013 balance in work in process?
Explanation / Answer
Equivalent units
cost per unit material labor overhead
Beginning cost 60,000 50,000 20,000
Added 280,000 265,000 106,000
$340,000 315,000 126,000
cost per unit $6.80 $7.50 $3
2)
3)Balance in manufactuirng overhead 26,000
4) Entry Manufacturing overhead $26,000
To Cost of goods sold $26,000
5)Ending balance
16,000*6.8 materials 108,800
8000*7.5 labor 60,000
8000*3 overhead 24,000
Beginning WIP 10,000 Completed and transgerred 34,000 Added 40,000 Ending WIP 16,000 Units to be accounted 50,000 Units accounted for 50,000Related Questions
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