Question

Horngren Woolens is a manufacturer of wool cloth. The information for December is as follows:

Beginning work in process                    10,000 units

Units started 35,000 units

Units completed                               28,000 units

Beginning work-in-process direct materials $18 ,000

Beginning work-in-process conversion       $ 26,200

Direct materials added during month         $144,000

Direct manufacturing labor during month    $20,000

Factory overhead during month                  $ 51,425

Beginning work in process was half converted as to labor and overhead. Direct materials are added at the beginning of the process. All conversion costs are incurred evenly throughout the process. Ending work in process was 65% complete.

Required:

Prepare a production cost worksheet using the weighted-average method.

Answer:                               PRODUCTION COST WORKSHEET

            Flow of production Physical Units           Direct Materials            Conversion

Work in process, beginning                                   10,000

Started during period                                             35,000

To account for    45,000

Units completed                                                    28,000

Work in process, ending                                       17,000

Accounted for                                                       45,000

                     Costs                           Totals                              Direct Materials          Conversion

Work in process,beginning

Costs added during period

Total costs to account for

Divided by equivalent units

Equivalent unit costs

         Assignment of costs - Units                         Cost per unit                         Amount

Transferred out                                                        

Work in process, ending                                          

Direct materials                             

Conversion

Costs accounted for

Answer 1

Weighted Average Equivalent units:

Step1: Prepare a Quantity schedule,  

Step 2:compute the Equivalent units.: Consider only completed units and Ending WIP., (Completed units always 100% and Ending WIP always take up to completed level)

Step3: Compute the cost per Equivalent unit.: For cost calculation: Beginning WIP and Started units to be considered.

Step4: Preparing a cost reconciliation

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