Question

Sandia Corporation manufactures metal toolboxes. It adds all materials at the beginning of the manufacturing process. The company has provided the following information:

	Units	Costs
Beginning work in process (27% complete)	33,000
Direct materials		$	34,000
Conversion cost			94,000
Total cost of beginning work in process		$	128,000
Number of units started	68,000
Number of units completed and transferred to finished goods	?
Ending work in process (57% complete)	84,000
Current period costs
Direct materials		$	87,000
Conversion cost			161,000
Total current period costs		$	248,000

Required:

1. Using the weighted-average method of process costing, complete each of the following steps:

a. Reconcile the number of physical units worked on during the period.

b. Calculate the number of equivalent units.

c. Calculate the cost per equivalent unit.

d. Reconcile the total cost of work in process.

Answer 1

1.

Units to account for:
Beginning WIP	33,000
Units started	68,000
Total	101,000
Units accounted for:
Units completed and transferred (101,000-84,000)	17,000
Ending WIP	84,000
Total	101,000

2.

		Equivalent units
	Physical units	Material	Conversion
Units completed and transferred	17,000	17,000	17,000
Ending WIP	84,000	84,000	47,880 (84,000*57%)
Total		101,000	64,880

3.

	Material	Conversion
Beginning WIP	$34,000	$94,000
Current period cost	87,000	161,000
Total	$121,000	$255,000
Cost per equivalent unit	$1.19802	$3.93033

4.

Cost to account for:
Beginning WIP		$128,000
Current period cost		248,000
Total cost to account for		$376,000
Cost accounted for:
Units completed and transferred:
Material (17,000*$1.19802)	$20,366
Conversion (17,000*$3.93033)	66,816
Total		$87,182
Ending WIP:
Material (84,000*$1.19802)	100,634
Conversion (47,880*$3.93033)	188,184
Total		288,818
Total cost accounted for		$376,000