Question

Weighted Average Method, Journal Entries

Muskoge Company uses a process-costing system. The company manufactures a product that is processed in two departments: Molding and Assembly. In the Molding Department, direct materials are added at the beginning of the process; in the Assembly Department, additional direct materials are added at the end of the process. In both departments, conversion costs are incurred uniformly throughout the process. As work is completed, it is transferred out. The following table summarizes the production activity and costs for February:

		Molding		Assembly
Beginning inventories:
Physical units		10,000		8,000
Costs:
Transferred in		—		$45,300
Direct materials		$22,000		—
Conversion costs		$13,800		$20,450
Current production:
Units started		25,000		?
Units transferred out		30,000		35,000
Costs:
Transferred in		—		?
Direct materials		$56,400		$39,550
Conversion costs		$106,900		$140,150
Percentage of completion:
Beginning inventory		40%		50%
Ending inventory		80		50

Required:

1. Using the weighted average method, prepare the following for the Molding Department:

a. A physical flow schedule

Molding Department, Physical flow schedule:
Units to account for:
Total units to account for
Units accounted for:
Units completed and transferred out:
Total units accounted for

b. An equivalent units calculation

	Total equivalent units
Direct Materials
Conversion Costs

c. Calculation of unit costs. Round your intermediate computations and final answer to four decimal places.
$______ per unit

d. Calculate the cost of ending work in process and cost of goods transferred out. Round your answers to the nearest dollar.
Cost of ending work in process: $_______
Cost of goods transferred out: $________

e. A cost reconciliation. When required, round your answers to the nearest dollar.

Costs to account for:
Beginning work in process
Costs incurred
Total costs to account for

Costs accounted for:
Transferred out
Ending work in process
Total costs accounted for

2. Prepare journal entries that show the flow of manufacturing costs for the Molding Department. (a) Materials are added at the beginning of the process, (b) conversion costs are recorded, and (c) units are transferred to the Assembly Department. When required, round your answers to the nearest dollar.

a.
b.
c.

3. Repeat Requirements 1 and 2 for the Assembly Department.

a. A physical flow schedule:

Assembly Department, Physical flow schedule:
Units to account for:
Total units to account for
Units accounted for:
Units completed and transferred out:
Total units accounted for

b. An equivalent units calculation

	Total Equivalent Units
Direct Materials
Conversion Costs
Transferred In

c. Calculate the total unit costs. Round your intermediate computations and final answer to four decimal places.
$______ per unit

d. Calculate the cost of ending work in process and cost of goods transferred out. Round your answers to the nearest dollar.
Cost of ending work in process: $________
Cost of goods transferred out: $_________

e. A cost reconciliation. If required, round your answers to the nearest dollar.

Costs to account for:
Beginning work in process
Costs incurred
Total costs to account for

Costs accounted for:
Transferred out
Ending work in process
Total costs accounted for

Note: Cost reconciliation totals differ due to rounding error.

Prepare journal entries that show the flow of manufacturing costs for the Assembly Department. (a) Materials are added at the end of the process, (b) conversion costs are recorded, and (c) the units are transferred to Finished Goods.

a.
b.
c.

Answer 1

1.

	Physical units	Material	Conversion
Units to account for
Work in Process Beginning	10000
Started during the period	25000
Total units to account for	35000
Units Accounted for
Completed and transferred	30000	30000	30000
Work in Process Ending	5000	5000	4000
Total Units Accounted for	35000
Equivalent units		35000	34000
	Material	Conversion	Total
Cost of Beginning Work in Process	$          22,000	$          13,800	$             35,800
Cost added during the period	$          56,400	$        106,900	$           163,300
Total Cost to account for	$          78,400	$       120,700	$           199,100
Equivalent units of Production	35000	34000
Cost per equivalent unit	$          2.2400	$          3.5500	$             5.7900
	Material	Conversion	Total
Units Completed and transferred out
Units transferred to next department	30000	30000
Cost per equivalent unit	$          2.2400	$          3.5500
Cost of units transferred out	$          67,200	$       106,500	$           173,700
	Material	Conversion	Total
Ending work in Process Inventory
Equivalent units of Production	5000	4000
Cost per equivalent unit	$          2.2400	$          3.5500
Cost of Ending work in Process Inventory	$          11,200	$          14,200	$             25,400
Total Costs Accounted for	$          78,400	$       120,700	$           199,100
Reconciliation
Costs to be accounted for :
Cost of beginning work in process inventory	$          35,800
Costs added to the production during the year	$        163,300
Total Costs to be accounted for	$       199,100
Cost of Ending work in Process Inventory	$          25,400
Cost of units transferred out	$        173,700
Total Costs accounted for	$       199,100

2.

Account Titles	Debit	Credit
Work in Process Inventory - Molding	$      56,400
Raw Material Inventory		$      56,400
Work in Process Inventory - Molding	$    106,900
Various Payables		$    106,900
Work in Process Inventory - Assembly	$    173,700
Work in Process Inventory - Molding		$    173,700

3.

	Physical units	Transferred in	Material	Conversion
Units to account for
Work in Process Beginning	8000
Units transferred from framing department	30000
Total units to account for	38000
Units Accounted for
Completed and transferred	35000	35000	35000	35000
Work in Process Ending	3000	3000	0	1500
Total Units Accounted for	38000
Equivalent units		38000	35000	36500
	Transferred In	Direct Material	Conversion Costs	Total
Cost of Beginning Work in Process	$          45,300	$                   -	$        20,450	$          65,750
Cost added during the period	$        173,700	$          39,550	$      140,150	$       353,400
Total Cost to account for	$        219,000	$          39,550	$     160,600	$       419,150
Equivalent units of Production	38000	35000	36500
Cost per equivalent unit	$          5.7632	$          1.1300	$        4.4000	$       11.2932
	Transferred in	Material	Conversion	Total
Units Completed and transferred out
Units transferred to next department	35000	35000	35000
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