Question

Piscataway Plastics Company manufactures a highly specialized plastic that is used extensively in the automobile industry. The following data have been compiled for the month of June. Conversion activity occurs uniformly throughout the production process.

Work in process, June 1—40,000 units:
Direct material: 100% complete, cost of	$	219,500
Conversion: 40% complete, cost of		61,800
Balance in work in process, June 1	$	281,300
Units started during June		220,000
Units completed during June and transferred out to finished-goods inventory		190,000
Work in process, June 30:
Direct material: 100% complete
Conversion: 60% complete
Costs incurred during June:
Direct material	$	482,500
Conversion costs:
Direct labor	$	83,150
Applied manufacturing overhead		249,450
Total conversion costs	$	332,600

Required:

Prepare schedules to accomplish each of the following process-costing steps for the month of June. Use the weighted-average method of process costing.

1. Analysis of physical flow of units.

2. Calculation of equivalent units.

3. Computation of unit costs.

4. Analysis of total costs.

Answer 1

Answer for question no.1:
Total units in opening work in process =40,000 units.--------------(1)
Units introduced during in to process during the month =220,000 units.-----------(2)
Therefore total units in either finished goods and closing work in process =(1) +(2) =260,000 units.------------(3)
Completed and transferred out from teh process =190,000 units.---------(4)
Therefore units in closing work in process =(3) -(4) =70,000 units.
Answer for question no.2:
Particulars	Direct material	% of completion	Equivalent units	Conversion units	% of completion	Equivalent units
Transferred during the month to finished goods	190000	100%	190000	190000	100%	190000
Closing work in process	70000	100%	70000	70000	60%	42000
Total units			260000			232000
Answer for question no.3:
Computation of unit costs = Direct material costs+Conversion costs.
Direct mateiral cost = Cost of direct material in opening WIP+Incurred during the month
$219500+$482,500
$702,000
Direct material cost per unit =$702000/260000
2.70--------(X)
Conversion costs=Cost of conversion in Opening work in process + Conversion costs incurred during the month.					61800+83150+249450
394400
Conversion costs per unit = $394400/232,000
=$1.70-----------(Y)
Therefore total costs =(X) +(Y)
$4.40
Answer for question no.4:
Analysis of total cost is as follows:
Cost of Goods completed and transferred	Amount
Equivalent unit cost	$4.40
Number of units completed and transferred	$190,000.00
Total cost of finished goods	$836,000.00
Cost in closing workin process	Amount
Direct material cost 70000 units * $2.7	$189,000.00
Conversion costs in Closing WIP (42000*1.70)	$71,400.00
Total cost in Closing WIP	$260,400.00