Question

16-3

Fast Co. produces its product through a single processing department. Direct materials are added at the start of production, and conversion costs are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing system. The Work in Process Inventory account has a balance of $102,300 as of October 1, which consists of $22,500 of direct materials and $79,800 of conversion costs.

During the month the company incurred the following costs:

Direct materials	$	204,050
Conversion		837,960

During October, the company started 158,000 units and transferred 168,000 units to finished goods. At the end of the month, the work in process inventory consisted of 29,000 units that were 80% complete with respect to conversion costs.

Required:
1. Prepare the company’s process cost summary for October using the weighted-average method.
2. Prepare the journal entry dated October 31 to transfer the cost of the completed units to finished goods inventory.

Answer 1

total costs to account for:
Beginning work in process				102,300
cost added during the year				1,042,010
total costs to account for:				1,144,310
total costs accounted for				1,144,310
Difference due to rounding				0
Unit reconciliation:
units to account for:
Beginning work in process				39,000
started during the year				158,000
total units to account for				197,000
Total units accounted for
transferred to finished goods				168,000
ending work in process inventor				29,000
total units accounted for				197,000
Equivalent units of production-(EUP)-weighted average method
				units	%	EUP-	%	EUP
					materials	materials	converstion	CC
transferred to finished goods				168,000	100%	168,000	100%	168,000
ending work in process inventory				29,000	100%	29,000	80%	23200
total units						197,000		191,200
Cost per Equivalent units of production						Materials		Conversion
Beginning work in process						22,500		79,800
cost added during the year						204,050		837,960
total costs					costs	226,550	costs	917,760
equivalent units of production					EUP	197,000	EUP	191,200
Cost per Equivalent units of production						1.15		4.80
total costs accounted for
cost of units transferred out:				EUP	cost EUP	total
direct materials				168,000	1.15	193200
conversion				168,000	4.80	806400
total costs transferred out						999600
cost of ending work in process				EUP	cost EUP	total
direct materials				29,000	1.15	33350
conversion				23,200	4.80	111360
total cost of ending work in process						144710
total costs accounted for							1144310
Req 2
	General Journal				Debit	Credit
	finished goods inventory				999600
	work in process inventory					999600