Question

Smith Electronic Company’s chip-mounting production department had 300 units of unfinished product, each 50% completed on September 30. During October of the same year, this department put another 900 units into production and completed 1,000 units and transferred them to the next production department. At the end of October, 200 units of unfinished product, 70% completed, were recorded in the ending Work-in-Process Inventory. Smith Electronic introduces all direct materials when the production process is 50% complete. Direct labor and factory overhead (i.e., conversion) costs are added uniformly throughout the process.

Following is a summary of production costs incurred during October:

	Direct Materials				Conversion Costs
Beginning work-in-process					$	2,850
Costs added in October	$	9,800				4,000
Total costs	$	9,800			$	6,850

Required:

1. Calculate each of the following amounts using weighted-average process costing:
a. Equivalent units of direct materials and conversion.
b. Equivalent unit costs of direct materials and conversion.
c. Cost of goods completed and transferred out during the period.
d. Cost of Work-in-Process Inventory at the end of the period.

2. Prepare a production cost report for October using the weighted-average method.
3. Repeat requirement 1 using the FIFO method.
4. Repeat requirement 2 using the FIFO method.

Answer 1

Answer:

	Physical Units	Completion	Materials	Conversion
Work in process beginning	300
Started during the period	900
To account for	1200
Units transferred to next department	1000	100%	1000	1000
Ending Work in Process :
Direct Material	200	100%	200
conversion	200	70%		140
Accounted for	1400		1200	1140

	Materials	Conversion	Total
Cost of beginning work in process	$ -	$2,850	$2,850
Cost added during the period	$9,800	$4,000	$13,800
Total cost	$9,800	$6,850	$16,650
Equivalent units of production	1200	1140
Cost per equivalent unit	$8.17	$6.09	$14.26

	Material	Conversion	Total
Ending work in Process Inventory
Equivalent units of Production	200	140
Cost per equivalent unit	$8.17	$6.09
Cost of Ending work in Process Inventory	$1,634	$852.6	2,486.6

Units Completed and transferred out
Units transferred to next department	1000	1000
Cost per equivalent unit	$8.17	$6.09
Cost of units transferred out	$8,170	6,090	$14,260