Question

The following partially completed process cost summary describes the July production activities of Ashad Company. Its production output is sent to its warehouse for shipping. All direct materials are added to products when processing begins. Beginning work in process inventory is 20% complete with respect to conversion.

Equivalent Units of Production	Direct Materials			Conversion
Units transferred out		35,500	EUP		35,500	EUP
Units of ending work in process		3,000	EUP		1,800	EUP
Equivalent units of production		38,500	EUP		37,300	EUP

Costs per EUP	Direct Materials				Conversion
Costs of beginning work in process		$	24,150			$	2,900
Costs incurred this period			403,200				213,440
Total costs		$	427,350			$	216,340

Units in beginning work in process (all completed during July)	2,500
Units started this period	36,000
Units completed and transferred out	35,500
Units in ending work in process	3,000

Prepare its process cost summary using the weighted-average method.

Answer 1

	Physical units	Equivalent units
Units to account for
Beginning work in process	2500
Units started	36000
Units to account for	38500
Units accounted for
Units completed and transferred out	35500	35500	35500
Ending work in process	3000	3000	1800
Units accounted for	38500	38500	37300

Cost per equivalent unit:

	Material	conversion
Beginning work in process	24150	2900
Current period cost	403200	213440
Total cost	427350	216340
equivalent unit	38500	37300
Cost per equivalent unit	427350/38500=$ 11.1	216340/37300=$5.8

		Equivalent unit
Cost to account for	Total	Material	conversion
Beginning work in process	27050	24150	2900
current period cost	616640	403200	213440
Total cost to account for	643690	427350	216340
cost accounted for
Units completed and transferred out	599950	35500*11.1=394050	35500*5.8=205900
Ending work in process	43740	3000*11.1=33300	1800*5.8=10440
cost accounted for	643690	427350	216340