Question

Massey Corporation uses a process cost system and the weighted-average cost flow assumption. Production begins in the Fabricating Department where materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. On March 1, the beginning work in process inventory consisted of 20,000 units which were 60% complete and had a cost of $175,000, $145,000 of which were materials costs. During March, the following occurred:

Materials added	$305,000
Conversion costs incurred	$120,000
Units completed and transferred out in March	50,000
Units in ending work in process March 31 (40% complete)	25,000

Instructions

Prepare a Process Cost Worksheet.

Answer 1

• Elements of Process Cost Worksheet

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	50,000	100%	50,000	100%	50,000
Units of ENDING WIP	25,000	100%	25,000	40%	10,000
Equivalent Units of Production			75,000		60,000
COST per EUP			Material		Conversion
Cost of Beginning WIP			$        145,000.00		$                                  30,000.00
Cost incurred during the period			$        305,000.00		$                                120,000.00
Total Costs		Costs	$        450,000.00	Costs	$                                150,000.00
Equivalent units of production		EUP	75,000	EUP	60,000
Cost per EUP			$              6.00000		$                                      2.50000

Costs to be accounted for:
Cost of Beginning WIP Inventory	$         175,000.00
Cost added to production during the period	$         425,000.00
Total Cost to be accounted for	$         600,000.00
Costs accounted for as follows:
Cost of units transferred out	$         425,000.00
Cost of Ending WIP Inventory	$         175,000.00
Total Cost accounted for	$         600,000.00

TOTAL COST ACCOUNTED FOR
Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	50,000	$                      6.00	$       300,000.00
- Conversion	50,000	$                      2.50	$        125,000.00
Total Cost transferred Out				$            425,000.00
Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	25,000	$                      6.00	$        150,000.00
- Conversion	10,000	$                      2.50	$          25,000.00
Total cost of ending WIP				$            175,000.00
Total costs accounted for					$                                600,000.00