Question

1)

Suburbia Company manufactures a product through a continuous single-step process. All materials are added at the beginning of processing. Production and cost data for the company for February 2016 are as follows:

Production data:
In process, beginning of month (20% converted)	1,000 units
Started during February	5,000 units
Completed and transferred to finished goods	4,500 units
In process, end of month (60% converted)	1,500 units
Manufacturing costs:
Work in process, beginning (Materials $3,000; Conversion Costs: $18,360)	$21,360
Materials	$45,000
Direct labor cost	$102,960
Applied Factory overhead cost	$51,480

Required:
Calculate the Following using the weighted average method:

Equivalent Units of Production for Direct materials	__________ (Do not enter commas in answer for example 5,000 should be entered as 5000)
Equivalent Units of Production for Conversion Costs	__________ (Do not enter commas in answer for example 5,000 should be entered as 5000)
Cost per Equivalent Unit – Direct Materials	$__________ (Round to 2 decimal places)
Cost per Equivalent Unit – Conversion Costs	$__________ (Round to 2 decimal places)
Total value of units transferred out	$__________.00 (Round to the nearest whole dollar and do not enter dollar signs or commas in answer for example $5,000 should be entered as 5000)
Total value of Ending Inventory	$__________.00 (Round to the nearest whole dollar and do not enter dollar signs or commas in answer for example $5,000 should be entered as 5000)

2)

Daosta Inc. uses the FIFO method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Work in process, beginning:
Units in process		900
Percent complete with respect to materials		40	%
Percent complete with respect to conversion costs		20	%
Costs in the beginning inventory:
Materials cost	$	530
Conversion cost	$	2108
Units started into production during the month		16,000
Units completed and transferred out		16,000
Costs added to production during the month:
Materials cost	$	32,180
Conversion cost	$	416,512
Work in process, ending:
Units in process		900
Percent complete with respect to materials		50	%
Percent complete with respect to conversion costs		70	%

Required:

Using the FIFO method:

Equivalent Units of Production for Direct materials	__________ (Do not enter commas in answer for example 5,000 should be entered as 5000)
Equivalent Units of Production for Conversion Costs	__________ (Do not enter commas in answer for example 5,000 should be entered as 5000)
Cost per Equivalent Unit – Direct Materials	$__________ (Round to 2 decimal places)
Cost per Equivalent Unit – Conversion Costs	$__________ (Round to 2 decimal places)
Total value of Ending Work in Process	$__________.00 (Round to the nearest whole dollar and do not enter dollar signs or commas in answer for example $5,000 should be entered as 5000)
Total value of units transferred out	$__________.00 (Round to the nearest whole dollar and do not enter dollar signs or commas in answer for example $5,000 should be entered as 5000)

Answer 1

Solution 1. Production Cost Report Using Weighted Average Method
		Equivalent Units
	Physical units	Direct Material	Conversion Costs
Beg. WIP, Feb	1,000
Units Started into Production	5,000
Units to Account For:	6,000
Units completed & Transferred	4,500	4,500	4,500
Ending WIP, 100% w.r.t Material & 60% w.r.t. C.C	1,500	1,500	900
Equivalent Units of Production(1)	6,000	6,000	5,400
Total Cost to account for, Cost per Equivalent Units, Cost assigned to Completed units, and Ending WIP
	Total Prod. Cost	Direct Material	Conversion Costs
Beg. WIP, Feb	21,360	3,000	18,360
Cost added during the Feb	199,440	45,000	154,440
Total Cost to account for (2)	220,800	48,000	172,800
Equivalent Units		6,000	5,400
Cost per equivalent unit (2÷1)		8	32
Cost Assignment:
Value of Units Comp. & Transferred.	180,000	36,000	144,000
Ending WIP, Feb.	40,800	12,000	28,800
Total Cost to account for	220,800	48,000	172,800

2) Using FIFO Method:
		Equivalent Units
		Direct Material	Conversion Costs
Beginning WIP:
Material- 400 × 60%(100-40)		540
Conversion:400 × 80%(100-20)			320
Units started & completed : (16,000-400)		15,600	15,600
Ending WIP:
Material- 400 × 50%		200
Conversion: 400 × 70%			280
Equivalent units of production Equivalent Units of Production		16,340	16,200
		Material	C. Cost
Cost Added during the month		$32,180	$416,512
Equivalent units of production Equivalent Units of Production		16,340	16,200
Cost per Equivalent Unit		$1.97	$25.71
Ending WIP:
Equivalent units of production Equivalent Units of Production		200	280
Cost per Equivalent Unit		$1.97	$25.71
Total Value of Ending WIP:		$394.00	$7,199.00
Total Value of units Transferred out:
		Material	Conversion	Total Cost
Cost of Beginning WIP		$530	$2,108	$2,638
Cost to Complete Beg. WIP:
(540× $1.97) and (320 × $25.71)		$1,064	$8,227	$9,291
Cost of Units started & Completed:
(15,600 × $1.97) and (15,600 × $25.71)		$30,732	$401,076	$431,808
Total Value of units Transferred out:		$32,326	$411,411	$443,737