Question

We produce picture frames for stores such as Michael’s and Hobby Lobby. In the assembly department, the wooden slats are added at the beginning of the process, and the glass is added when the process is 25% complete. Conversion costs are added evenly throughout the period. Here is the data related to the assembly department for November 2018:

WIP, November 1 (40% complete) 60 frames

Started in November 500 frames

WIP, November 30 (15% complete) 100 frames

Costs included in the Beginning WIP:

DM - wooden slats $ 300

DM - glass $ 180

CC $ 168

Costs added during November:

DM - wooden slats $ 2,950

DM - glass $ 1,500

CC $ 3,580

Note: When calculating equivalent units (Step 2), total costs (Step 3), and cost per equivalent unit (Step 4), you will have 3 columns - DM slats, DM glass, and CC. Therefore, when you assign costs in Step 5, you’ll assign all 3 costs for each layer.

Using Weighted Average:

a. Prepare T-accounts for WIP in units and in $ to represent this situation.

b. Prepare the 5-step Production Cost Report.

c. Update the T-accounts to reflect the amounts transferred out and the amounts in Ending WIP.

Answer 1

Step for solution
Step 1	Equivalent Units of production = Physical units multiplied by % of the competition
Step 2	Calculate the total cost to be accounted for
Step 3	Cost per Equivalent Unit = total cost to be accounted for / Equivalent Units of production
Step 4	The cost assigned to units transferred out = units completed and transferred out * Cost per Equivalent Unit
Step 5	The cost assigned to units ending work in progress = equivalent units in ending WIP inventory * Cost per Equivalent Unit
Ending work in progress units completed only 15%. It means Glass is not added in the process. So, 0% used in DM glass.

Company Name
Assembly Department production Report
Weighted average Method
Month ended Nov 30,2018
Summary of Physical units			Frames
Units in beginning WIP inventory			60
Units started during month			500
Total unit to be accounted for			560
Units completed and transferred out (560-100)			460
Units in ending WIP inventory			100
Total unit accounted for			560
Equivalent Units of production
Particulars	Physical units	DM - wooden slats		DM - glass		CC (Conversion costs)
		%	units	%	units	%	units
units in beginning WIP inventory	60	100%	60	100%	60	100%	60
Units in Started and completed (460-60)	400	100%	400	100%	400	100%	400
units in ending WIP inventory	100	100%	100	0%	0	15%	15
Equivalent Units of production			560		460		475
Summary of cost to be accounted
	DM - wooden slats	DM - glass	CC (Conversion costs)	Total
Cost in beginning WIP	$           300	$           180	$           168	$           648
Cost incurred during Month (Add)	$        2,950	$        1,500	$        3,580	$        8,030
total cost to be accounted for	$        3,250	$        1,680	$        3,748	$        8,678
cost per Equivalent Unit
total cost to be accounted for	3250	1680	3748
Equivalent Units of production	560	460	475
Cost per Equivalent Unit	$     5.8036	$     3.6522	$     7.8905	$   17.3463
Assign costs to units transferred out and units in ending WIP inventory
cost assigned to units transferred out
units completed and transferred out	460	460	460
Cost per Equivalent Unit	$     5.8036	$     3.6522	$     7.8905
cost assigned to units transferred out	$ 2,669.64	$ 1,680.00	$ 3,629.64	$        7,979
cost assigned to units ending work in progress
equivalent units in ending WIP inventory	100	0	15
Cost per Equivalent Unit	$     5.8036	$     3.6522	$     7.8905
cost assigned to units ending work in progress	$     580.36	$               -	$     118.36	$           699
Total cost assigned				$        8,678

Assembly Work in Process Account
Date	Debit	Credit	Date
Beginning WIP	$        648	Cost transferred out	$    7,979
DM - wooden slats	$    2,950
DM - glass	$    1,500
CC (Conversion costs)	$    3,580
	$    8,678		$    7,979
Ending WIP	$        699