Question

P5. 34 Weighted average process costing: manufacturer

Tringle Zipper Company accumulates costs for its single product using process costing. Direct materials is added at the beginning of the production process and conversion activity occurs uniformity throughout the process. A partially completed production repost for May follows.

Production report, May
	Physical units	Percentage of completion with respect to conversion 40%		Equivalent units
			Direct materials	Conversion
Work in process, 1 May	25000	40%
Units started during May	30000
	55000
Units completed and transferred out during May	35000		35000	35000
Work in Process, 31 May	20000	80%
Total units accounted for	55000
		Direct Materials	Conversions	Total
Work in process, 1 May		$143,000	$474,700	$617,700
Costs incurred during May		165000	2009000	2174000
Total costs to account for		$308,000	$2,583,700	$2,791,700

Required

Prepare a journal entry to record the transfer of the cost of goods completed and transferred out during May

Answer 1

	Physical units	Material	Conversion
Units to account for
Work in Process Beginning	25000
Started during the period	30000
Total units to account for	55000
Units Accounted for
Completed and transferred	35000	35000	35000
Work in Process Ending	20000	20000	16000
Total Units Accounted for	55000
Equivalent units		55000	51000
	Material	Conversion	Total
Cost of Beginning Work in Process	$        143,000	$        474,700	$           617,700
Cost added during the period	$        165,000	$    2,009,000	$        2,174,000
Total Cost to account for	$       308,000	$    2,483,700	$       2,791,700
Equivalent units of Production	55000	51000
Cost per equivalent unit	$              5.60	$            48.70	$               54.30
	Material	Conversion	Total
Units Completed and transferred out
Units transferred to next department	35000	35000
Cost per equivalent unit	$              5.60	$            48.70
Cost of units transferred out	$       196,000	$    1,704,500	$       1,900,500
	Material	Conversion	Total
Ending work in Process Inventory
Equivalent units of Production	20000	16000
Cost per equivalent unit	$              5.60	$            48.70
Cost of Ending work in Process Inventory	$       112,000	$       779,200	$           891,200
Total Costs Accounted for	$       308,000	$    2,483,700	$       2,791,700
Reconciliation
Costs to be accounted for :
Cost of beginning work in process inventory	$        617,700
Costs added to the production during the year	$    2,174,000
Total Costs to be accounted for	$    2,791,700
Cost of Ending work in Process Inventory	$        891,200
Cost of units transferred out	$    1,900,500
Total Costs accounted for	$    2,791,700

Assuming goods completed finished goods.

Account Titles	Debit	Credit
Finished Goods Inventory	$     1,900,500
Work in Process		$      1,900,500