Question

Work-in-Process inventory, January 1	10,000 units
Direct Materials, 100% complete	$10,000
Direct Labor, 30% complete	$ 1,060
Factory Overhead, 40% complete	$ 1,620
Total Value	$12,680
Units Started during January	40,000 units
Costs Incurred during January
Direct Materials	$ 44,000
Direct Labor	$ 22,440
Factory Overhead	$ 43,600
Total Cost Incurred	$111,040
Units Completed & Transferred during January	44,000 units
Costs of Units Transferred Out in January
Work-in-Process inventory, January 31
Direct Materials, 100% complete
Direct Labor, 50% complete
Factory Overhead, 60% complete
Total Value

Using the weighted average method of process costing, calculate the (1) value of inventory transferred out of the department, (2) ending work-in-process inventory value for materials, (3) ending work-in-process inventory value for direct labor, (4) ending work-in-process inventory value for factory overhead, (5) total value of ending work-in-process inventory. You must show your work.

Using the first-in-first-out method of process costing, calculate the (1) value of inventory transferred out of the department, (2) ending work-in-process inventory value for materials, (3) ending work-in-process inventory value for direct labor, (4) ending work-in-process inventory value for factory overhead, (5) total value of ending work-in-process inventory. You must show your work.

Answer 1

Weighted Average
UNITS TO ACCOUNT FOR:
Beginning Work in Process units				10,000
Add: Units Started in Process				40,000
Total Units to account for:				50,000
UNITS TO BE ACCOUNTED FOR:
Units started and completed				44,000
Ending Work in Process				6,000
Total Units to be accounted for:				50,000
Equivalent Units:
			Material Cost		Labour		Overheads
			% Completion	Units	% Completion	Units	% Completion	Units
Units started and completed			100%	44,000	100%	44,000	100%	44,000
Ending Work in Process			100%	6,000	50%	3,000	60%	3,600
Total Equivalent units				50,000		47,000		47,600
TOTAL COST TO ACCOUNT FOR:
			Material	Labour	Overheads
Beginning work in Process			10,000	1,060	1,620
Cost Added during May			44,000	22,440	43,600
Total Cost to account for:			54,000	23,500	45,220
Total Cost to account for:					99,220
COST PER EQUIVALENT UNIT:
			Material	Labour	Overheads
Total cost added during the year			54,000	23,500	45,220
Equivalent Units			50,000	47,000	47,600
Cost per Equivalent unit			1.08	0.5	0.95
TOTAL COST ACCOUNTED FOR:
Ending Work in process (6,000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			6,000	1.08	6480
Labor			3,000	0.5	1500
Overheads			3,600	0.95	3420
Total cost of Ending Work in process:					11,400
FIFO
UNITS TO ACCOUNT FOR:
Beginning Work in Process units				10,000
Add: Units Started in Process				40,000
Total Units to account for:				50,000
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				10000
Units started and completed				34,000
Ending Work in Process				6,000
Total Units to be accounted for:				50,000
Equivalent Units:
			Material Cost		Labor		Overheads
			% Completion	Units	% Completion	Units	% Completion	Units
Units completed from Beg. WIP			0%	0	70%	7,000	40%	6,000
Units started and completed			100%	34,000	100%	34,000	100%	34,000
Ending Work in Process			100%	6,000	50%	3,000	60%	3,600
Total Equivalent units				40,000		44,000		43,600
COST PER EQUIVALENT UNIT:
			Material	Labor	Overheads
Total cost added during the year			44,000	22,440	43,600
Equivalent Units			40,000	44,000	43,600
Cost per Equivalent unit			1.1	0.51	1
TOTAL COST ACCOUNTED FOR:
Ending Work in process (6,000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			6,000	1.1	6600
Labor			3,000	0.51	1530
Overheads			3,600	1	3600
Total cost of Ending Work in process:					11,730