Question

Piscataway Plastics Company manufactures a highly specialized plastic that is used extensively in the automobile industry. The following data have been compiled for the month of June. Conversion activity occurs uniformly throughout the production process.

Work in process, June 1—60,000 units:
Direct material: 100% complete, cost of	$	285,000
Conversion: 40% complete, cost of		174,800
Balance in work in process, June 1	$	459,800
Units started during June		240,000
Units completed during June and transferred out to finished-goods inventory		200,000
Work in process, June 30:
Direct material: 100% complete
Conversion: 60% complete
Costs incurred during June:
Direct material	$	495,000
Conversion costs:
Direct labor	$	86,300
Applied manufacturing overhead		258,900
Total conversion costs	$	345,200

Required:

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

1. Analysis of physical flow of units.

2. Calculation of equivalent units.

3. Computation of unit costs.

4. Analysis of total costs.

Answer 1

1) Physical flow of units

	Total Units		Total Units
Beginning work in process	60000	Units completed and transferred out	200000
Unit started	240000	Ending work in process	100000
Total Unit	300000	Total Units	300000

2) Calculate equivalent unit

	Physical Unit	EUP-Material	EUP-Conversion
Units completed and transferred out	200000	200000	200000
Ending work in process	100000	100000	60000
Total	300000	300000	260000

3) Calculate unit Cost

	Material	Conversion
Beginning work in process	285000	174800
Cost added	495000	345200
Total Cost	780000	520000
Equivalent unit	300000	260000
Unit Cost	2.6	2

4) Analysis of total Cost

	Material	Conversion	Total
Unit completed and transferred out	200000*2.6 = 520000	200000*2 = 400000	920000
Cost of ending work in process	100000*2.6 = 260000	60000*2 = 120000	380000
Total	780000	520000	1300000