Question 2: Weighted average process costing: m Question 2: Weighted average pro

Question

Question 2: Weighted average process costing: m Question 2: Weighted average process costing: manufacturer (13 Marks) A2Z Company produces a variety of stationery products. One product, sealing wax sticks, passes through two processes: blending and moulding. The weighted average method is used to account for the costs of production. After blending, the resulting product is sent to the moulding department, where it is poured into moulds and cooled. The following information relates to the blending process for August 1. WIP, 1 August, had 30 000 kg, 20% complete. Costs associated with partially completed units were Materials Direct labour Overhead applied $220 000 $30 000 $20 000 2. WIP, 31 August, had 50 000 kg, 40% complete. 3. Units completed and transferred out totalled 480 000 kg. Costs added during the month were (all inputs are added uniformly): $5 800 000 $4 250 000 $1 292 500 Direct labour Overhead applied

Explanation / Answer

Cost of Prduction report Physical and Equivalent unit schedule Equivalent Units Flow Of Units Physical Units Direct Material Direct Labour Overhead Units to be accounted for Beginning work in process inventory 30000 Units started this period 500000 Total u nits to be accounted for   Ans A 530000 Units accounnted for: Completed and transferred out (b) 480000 480000 480000 480000 Ending work in progress inventory© 50000 20000 20000 20000 Total units to be accounted for (f)    -Equivalent units 530000 500000 500000 500000 Ans Ans 2 Flow of Cost Cost in the begnning work in progress inventory 270000 220000 30000 20000 Cost added in current period 11342500 5800000 4250000 1292500 Total Cost to be accounted for (e)     11612500 6020000 4280000 1312500 Cost per equivalent unit (a)    (e/f) Ans 1 23.23 12.04 8.56 2.63 Ans 3 Cost accounted for Cost assigned to units transferred out (a*b)   11148000 5779200.00 4108800.00 1260000.00 Cost in ending work in progress inventory (a*c)     464500 240800.00 171200.00 52500.00 Total Cost accounted for    11612500.00 6020000.00 4280000.00 1312500.00 Ans 4 Cost Reconciliations Schedule Flow of Cost Cost in the begnning work in progress inventory 270000 Cost added in current period 11342500 Total Cost 11612500 Cost accounted for Cost assigned to units transferred out (480000*23.23) 11148000 Cost in ending work in progress inventory (a*c)     Direct Material (20000*12,04) Conversion Cost (20000*(8.56+2.63)) Total cost of Ending WIP 464500 Total Cost accounted for    11612500

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