PA3-1 Preparing a Process Costing Production Report (Weighted-Average Method) [L

Question

PA3-1 Preparing a Process Costing Production Report (Weighted-Average Method) [LO 3-2, 3-3, 3-4]

Sandia Corporation manufactures metal toolboxes. It adds all materials at the beginning of the manufacturing process. The company has provided the following information:

Required:
1 & 2. Using the weighted-average method of process costing, complete each of the following steps:

a. Reconcile the number of physical units worked on during the period.  



b. Calculate the number of equivalent units.



c. Calculate the cost per equivalent unit. (Round cost per Equivalent Unit to 5 decimal places.)  



d. Reconcile the total cost of work in process.(Use Cost per Equivalent Unit rounded to 5 decimal places and round your final answers to the nearest whole dollar amount.)

PA3-1 Preparing a Process Costing Production Report (Weighted-Average Method) [LO 3-2, 3-3, 3-4]

Sandia Corporation manufactures metal toolboxes. It adds all materials at the beginning of the manufacturing process. The company has provided the following information:

Required:
1 & 2. Using the weighted-average method of process costing, complete each of the following steps:

a. Reconcile the number of physical units worked on during the period.  



b. Calculate the number of equivalent units.



c. Calculate the cost per equivalent unit. (Round cost per Equivalent Unit to 5 decimal places.)  



d. Reconcile the total cost of work in process.(Use Cost per Equivalent Unit rounded to 5 decimal places and round your final answers to the nearest whole dollar amount.)

Units Costs Beginning work in process (30% complete) 35,000 Direct materials $ 48,000 Conversion cost 103,000 Total cost of beginning work in process $ 151,000 Number of units started 76,000 Number of units completed and transferred to finished goods ? Ending work in process (59% complete) 76,000 Current period costs Direct materials $ 88,000 Conversion cost 152,000 Total current period costs $ 240,000

Explanation / Answer

a. Reconcile the number of physical units worked on during the period.  

Beginning unit 35000   

Started 76000

Total Units 111,000

Completed 35000 (111,000 - 76000)

Ending 76000

Total 111,000

b. Calculate the number of equivalent units.

Material Conversion

Transferred to next department 35000 35000

Ending WIP

Material 88000*59% 51920

Conversion 88000*41% 36080

equivalent units of production 86920 71080

Units transferred to next department = Units beginning + Unit started - Units ending

= 35000 + 76000 - 76000

= 35000

c. Calculate the cost per equivalent unit.

Material conversion

Cost of beginning 48000 103000

Cost added 151000 152000

Total (a) 199000 255000

Equivalent unit (b) 86920 71080

cost per equivalent unit (a/b) 2.28 3.58

d. Reconcile the total cost of work in process.

Cost of beginning work in progress (48000+103000) 151000

Cost added to production (151000+152000) 303000

Total 454000

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