Question

In: Accounting

Because most of the parts for its irrigation systems are standard, Waterways handles the majority of...

Because most of the parts for its irrigation systems are standard, Waterways 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 Packaging 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:
     Units in process 23,000
     Stage of completion for materials 80%
     Stage of completion for labor and overhead 30%
     Costs in work in process inventory:
       Materials $169,100
       Labor 67,890
       Overhead 17,360
Total costs in beginning work in process $254,350
Units started into production in January 60,000
Units completed and transferred in January 57,500
Costs added to production:
     Materials $263,640
     Labor 292,815
     Overhead 60,300
Total costs added into production in January $616,755
Work in process ending:
     Units in process 25,500
     Stage of completion for materials 50%
     Stage of completion for labor and overhead 10%

Solutions

Expert Solution

Since nothing is specified, i have used FIFO method

Physcial units Materials Conversion
Work in Process Beginning 23000
Started during the period 60000
To account for 83000
Work in Process Beginning 23000 4600 16100
Units started and completed 34500 34500 34500
Units transferred to next department 57500 39100 50600
Ending Work in Process : 25500 12750 2550
Accounted for 83000
Equivalent units 51850 53150
Materials Conversion Total
Cost added during the period $         2,63,640 $       3,53,115 $          6,16,755
Equivalent units of Production 51850 53150
Cost per equivalent unit $                 5.08 $              6.64 $               11.73
Cost Reconciliation
Materials Conversion Total
Ending work in Process Inventory
Equivalent units of Production 12750 2550
Cost per equivalent unit $                 5.08 $              6.64
Cost of Ending work in Process Inventory $            64,830 $          16,942 $             81,772
Materials Conversion Total
Units Completed and transferred out
Cost of Beginning Work in Process $         1,69,100 $          85,250 $          2,54,350
Cost of work on Beginning Work in Process $            23,389 $       1,06,964 $          1,30,353
Total Cost of Beginning WIP $         1,92,489 $      1,92,214 $          3,84,703
Units started and completed 34500 34500
Cost per equivalent unit $                 5.08 $              6.64
Cost of units started and completed $         1,75,421 $      2,29,209 $          4,04,630
Cost of units transferred out $         3,67,910 $      4,21,423 $          7,89,333
Reconciliation
Costs to be accounted for :
   Cost of beginning work in process inventory $         2,54,350
   Costs added to the production during the year $         6,16,755
   Total Costs to be accounted for $         8,71,105
Cost of Ending work in Process Inventory $            81,772
Cost of units transferred out $         7,89,333
   Total Costs accounted for $         8,71,105

Weighted Average Method

Physcial units Materials Conversion
Work in Process Beginning 23000
Started during the period 60000
To account for 83000
Units transferred to finished goods 57500 57500 57500
Work in Process Ending 25500 12750 2550
Accounted for 83000
Equivalent units 70250 60050
Materials Conversion Total
Cost of Beginning Work in Process $         1,69,100 $          85,250 $          2,54,350
Cost added during the period $         2,63,640 $       3,53,115 $          6,16,755
Total Cost $         4,32,740 $       4,38,365 $          8,71,105
Equivalent units of Production 70250 60050
Cost per equivalent unit $                 6.16 $              7.30 $               13.46
Materials Conversion Total
Ending work in Process Inventory
Equivalent units of Production 12750 2550
Cost per equivalent unit $                 6.16 $              7.30
Cost of Ending work in Process Inventory $            78,540 $          18,615 $             97,155
Units Completed and transferred out
Units transferred to next department 57500 57500
Cost per equivalent unit $                 6.16 $              7.30
Cost of units transferred out $         3,54,200 $       4,19,750 $          7,73,950
Reconciliation
Costs to be accounted for :
   Cost of beginning work in process inventory $         2,54,350
Costs added to the production during the year $         6,16,755
   Total Costs to be accounted for $         8,71,105
Cost of Ending work in Process Inventory $            97,155
Cost of units transferred out $         7,73,950
   Total Costs accounted for $         8,71,105

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