Question

Janes Paper Products (JPP) manufactures inkjet, laser and specialty papers for the consumer market. JPP uses a process costing system.

Information for February in the first processing department (Mixing) is as follows.

Required:

1. Using Weighted-Average Method compute equivalent units for direct material and conversion costs. Prepare Cost of Production Schedule that includes the cost per equivalent units for direct material and conversion costs, and summary of costs to account for and the cost of units transferred and the cost of the units in ending work in process.

2. Using FIFO Method compute equivalent units for direct material and conversion costs. Prepare Cost of Production Schedule that includes the cost per equivalent units for direct material and conversion costs, and summary of costs to account for and the cost of units transferred and the cost of the units in ending work in process.

Physical Quantities (in tonnes)		Direct Materials			Conversion Costs
Beginning WIP (DM 90% complete, CC 40% complete)	60,000		$4,070,220			$751,080
Started in February				412,500
Completed and transferred in February				382,500
Ending WIP (DM 60% complete, CC 30% complete)				90,000
Costs added during February 2011		$26,564,625			$11,484,045

Answer 1