Question

Moravia Company processes and packages cream cheese. The following data have been compiled for the month of April. Conversion activity occurs uniformly throughout the production process.

Work in process, April 1—12,000 units:
Direct material: 100% complete, cost of	$	16,000
Conversion: 20% complete, cost of		3,900
Balance in work in process, April 1	$	19,900
Units started during April		120,000
Units completed during April and transferred out to finished-goods inventory		97,000
Work in process, April 30:
Direct material: 100% complete
Conversion: 25% complete
Costs incurred during April:
Direct material	$	300,800
Conversion costs:
Direct labor	$	47,000
Applied manufacturing overhead		97,150
Total conversion costs	$	144,150

Prepare schedules to accomplish each of the following process-costing steps for the month of April. Use the weighted-average method of process costing.

Required:

1. Analysis of physical flow of units.

2. Calculation of equivalent units.

3. Computation of unit costs. (Round "Cost per Equivalent Unit" to 2 decimal places.)

4. Analysis of total costs. (Round "Cost per Equivalent Unit" to 2 decimal places.)

Answer 1

Requirement 1

Reconciliation of Units
A	Opening WIP	12,000
B	Introduced	1,20,000
C=A+B	TOTAL	1,32,000
D	Transferred	97,000
E=C-D	Closing WIP	35,000

Requirement 2

	Material	Conversion
Equivalent Units of Production	1,32,000	1,05,750

Requirement 3

	Material	Conversion
Cost per equivalent Unit	$                  2.40	$            1.40

Requirement 4

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$     19,900.00
Cost incurred during period	$ 4,44,950.00
Total cost to be accounted for	$ 4,64,850.00
Costs accounted for as follows:
Cost of Units Transferred Out	$ 3,68,600.00
Cost of Ending Wip	$     96,250.00
Total cost accounted for	$ 4,64,850.00

Working

Statement of Equivalent Units
				Material		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	97,000			100%	97,000	100%	97,000
Closing WIP	35,000			100%	35,000	25%	8,750
Total	1,32,000			Total	1,32,000	Total	1,05,750

Cost per Equivalent Units
COST		Material	Conversion	TOTAL
Beginning WIP Inventory Cost		$       16,000	$                 3,900	$              19,900
Cost incurred during period		$   3,00,800	$           1,44,150	$          4,44,950
Total Cost to be accounted for		$   3,16,800	$           1,48,050	$          4,64,850
Total Equivalent Units		1,32,000	1,05,750
Cost per Equivalent Units		$            2.40	$                   1.40

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$             2.40	35,000	$   84,000	$     97,000	$    2,32,800
Conversion	$             1.40	8,750	$   12,250	$     97,000	$    1,35,800
TOTAL	$     4,64,850	TOTAL	$   96,250	TOTAL	$    3,68,600