Wallace, Inc., produces a product tha goes through three departments: Machining,
ID: 2530906 • Letter: W
Question
Wallace, Inc., produces a product tha goes through three departments: Machining, Assembly, and Polishing. Materials are added at the beginning of the machining operation; labor and overhead are added uniformly throughout the process. The Machining department had work in process at the beginning and end of 1998 as follows:
The company completed 42,500 units during the year and incurred the folowing manufacturing costs:
The inventory at the beginning of the year was carried at the following costs:
REQUIRED:
Prepare a Cost of Production report using the Weighted Average Method
Percentage of Completion Materials Conversion Costs Januarty 1, 1998, 2,500 units 100 60 December 31, 1998, 4,000 units 100 50Explanation / Answer
Answers
Reconciliation of Units
Opening WIP
2500
Introduced
44000
TOTAL
46500
Transferred
42500
Closing WIP
4000
Statement of Equivalent Units
Material
Conversion Cost
Units
Complete %
Equivalent units
Complete %
Equivalent units
Transferred
42500
100%
42500
100%
42500
Closing WIP
4000
100%
4000
50%
2000
Total
46500 Units
Total
46500
Total
44500
Cost per Equivalent Units
COST
Material cost
Conversion cost
TOTAL
Opening + Current cost
$ 1,67,750.00
$ 1,88,825.00
$ 3,56,575.00
Total Equivalent Units
46500
44500
Cost per Equivalent Units
$ 3.61
$ 4.24
#DIV/0!
Statement of cost
Cost
Cost/unit
Closing WIP
Transferred
Units
Cost Allocated
Units
Cost Allocated
TOTAL
Material
$ 3.61
4000
$ 14,430.11
42500
$ 1,53,319.89
$ 1,67,750.00
Conversion cost
$ 4.24
2000
$ 8,486.52
42500
$ 1,80,338.48
$ 1,88,825.00
Total
$ 7.85
TOTAL
$ 22,916.62
TOTAL
$ 3,33,658.38
$ 3,56,575.00
Cost Incurred:
Mixing
$ -
Material
$ 1,67,750.00
Conversion Cost
$ 1,88,825.00
Total
$ 3,56,575.00
Cost Accounted:
Ending WIP:
Mixing
$ -
Material
$ 14,430.11
Conversion Cost
$ 8,486.52
$ 22,916.62
Units completed and transferred:
Mixing
$ -
Material
$ 1,53,319.89
Conversion Cost
$ 1,80,338.48
$ 3,33,658.38
Total cost accounted for
$ 3,56,575.00
Reconciliation of Units
Opening WIP
2500
Introduced
44000
TOTAL
46500
Transferred
42500
Closing WIP
4000
Statement of Equivalent Units
Material
Conversion Cost
Units
Complete %
Equivalent units
Complete %
Equivalent units
Transferred
42500
100%
42500
100%
42500
Closing WIP
4000
100%
4000
50%
2000
Total
46500 Units
Total
46500
Total
44500
Cost per Equivalent Units
COST
Material cost
Conversion cost
TOTAL
Opening + Current cost
$ 1,67,750.00
$ 1,88,825.00
$ 3,56,575.00
Total Equivalent Units
46500
44500
Cost per Equivalent Units
$ 3.61
$ 4.24
#DIV/0!
Statement of cost
Cost
Cost/unit
Closing WIP
Transferred
Units
Cost Allocated
Units
Cost Allocated
TOTAL
Material
$ 3.61
4000
$ 14,430.11
42500
$ 1,53,319.89
$ 1,67,750.00
Conversion cost
$ 4.24
2000
$ 8,486.52
42500
$ 1,80,338.48
$ 1,88,825.00
Total
$ 7.85
TOTAL
$ 22,916.62
TOTAL
$ 3,33,658.38
$ 3,56,575.00
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