Question

Because most of the parts for its irrigation systems are standard, Alpha handles

the majority of its manufacturing as a process cost system. There are multiple process

departments. Three of these departments are the Molding, Cutting, and Welding departments.

All items eventually end up in the Package department which prepares items for

sale in kits or individually.

The following information is available for the Molding department for January.

Work in process beginning:  22,000 units , Total costs in beginning work in process $252,854

Costs in work in process inventory:   Materials $168,020, Labor 67,564, Overhead 17,270

Units startedinto production in January 60,000

Units completed and transferred-outin January 58,000

Costs added to production: Materials $264,940, Labor 289,468, Overhead 60,578 =Total costs added into production in January $614,986

Work in process ending:

Units in process 24,000

Stage of completion for materials 100%

Stage of completion for labor and overhead 10%

Instructions for part 3

(a) Prepare a production cost report for Alpha using the weighted-average method.

Answer 1

1)
			Materials	Conversion
Equivalent units of Production			82,000	60,400
Working:
			Materials		Conversion
	Physical Units		% of completion	Equivalent Units of Production	% of completion	Equivalent Units of Production
Units completed and transferred out	58,000		100%	58,000	100%	58,000
Units in ending Work in process	24,000		100%	24,000	10%	2,400
Total	82,000			82,000		60,400
2)
			Materials	Conversion
Cost per equivalent unit			$                           5.28	$                              7.20
Working:
			Materials	Conversion	Total
Work in process Inventory			$                   1,68,020	$                          84,834	$              2,52,854
Costs added during the perod			$                   2,64,940	$                      3,50,046	$              6,14,986
Total Costs			$                   4,32,960	$                      4,34,880	$              8,67,840
/ Equivalent units of production			82,000	60,400
Cost per Euivalent units of produciton			$                           5.28	$                              7.20
3)
			Materials	Conversion	Total
Costs of Ending Work in process			$                   1,26,720	$                          17,280	$              1,44,000
Working:
			Equivalent units of production	Unit Costs	Total Costs
Materials			24,000	$                              5.28	$              1,26,720
Conversion Costs			2,400	$                              7.20	$                  17,280
Total					$              1,44,000
4)
			Materials	Conversion	Total
Costs of Units transferred out			$                   3,06,240	$                      4,17,600	$              7,23,840
Working:
			Equivalent units of production	Unit Costs	Total Costs
Materials			58,000	$                              5.28	$              3,06,240
Conversion Costs			58,000	$                              7.20	$              4,17,600
Total					$              7,23,840
5)
Costs Reconcilation report
Beginning Work in process Cost	$          2,52,854
Costs added during the period	$          6,14,986
Total Costs to be accounted for	$          8,67,840
Cost of Units in ending Work in process	1,44,000
Cost of Units completed and transferred out	7,23,840
Total costs acconted for	7,23,840