Question

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 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: Units in process 22,000 Stage of completion for materials 80% Stage of completion for labor and overhead 30% Costs in work in process inventory: Materials $168,360 Labor 67,564 Overhead 17,270 Total costs in beginning work in process $253,194 Units started into production in January 60,000 Units completed and transferred in 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 50% Stage of completion for labor and overhead 10%

Collapse question part (a) Prepare a production cost report for Waterways using the weighted-average method. (Round unit costs to 2 decimal places, e.g. 2.25.)

WATERWAYS CORPORATION

Molding Department Production Report

Equivalent Units

Quantities Physical Units Materials Conversion Costs

Units to be accounted for

Work in process, Jan. 1

Started into production

Total units

Units accounted for

Transferred out

Work in process, Jan 31

Total units

Costs Materials Conversion Costs Total  

Unit costs

Costs in January $ $ $

Equivalent units

Unit costs $ $ $

Costs to be accounted for

Work in process, Jan. 1 $

Started into production

Total costs $

Cost Reconciliation Schedule

Costs accounted for

Transferred out $

Work in process, Jan. 31

Materials

Conversion costs

Total costs $

this is orginal format

Answer 1

• All working forms part of the answer
• Working #1

Reconciliation of Units
A	Opening WIP	22000
B	Introduced	60000
C=A+B	TOTAL	82000
D	Transferred	58000
E=C-D	Closing WIP	24000

Statement of Equivalent Units
		Material		Conversion Cost
	Units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	58000	100%	58000	100%	58000
Closing WIP	24000	50%	12000	10%	2400
Total	82000	Total	70000	Total	60400

• Requirement 1

Molding Department Production Report

Equivalent Units

Quantities Physical Units Materials Conversion Costs

Units to be accounted for

Work in process, Jan. 1 = 22,000

Started into production = 60,000

Total units = 82,000

Units accounted for:

Transferred out = 58,000

Work in process, Jan 31 = 24,000

Total units = 82,000

• Requirement 2

Working & Answer for Cost per Equivalent Units

Cost per Equivalent Units
COST	Material	Conversion Cost	TOTAL
Beginning WIP Inventory Cost	$        168,360.00	$      84,834.00	$          253,194.00
Cost incurred during period	$        264,940.00	$   350,046.00	$          614,986.00
Total Cost to be accounted for	$        433,300.00	$   434,880.00	$          868,180.00
Total Equivalent Units	70000	60400
Cost per Equivalent Units	$                6.19	$            7.20	$ 13.39

• Requirement 3

Costs to be accounted for

Work in process, Jan. 1 = $ 253,194

Started into production = $ 614,986

Total costs = $ 868,180

Cost Reconciliation Schedule

Costs accounted for

Transferred out = 58,000 Equivalent unit x $ 13.39 = $ 776,620

Work in process, Jan. 31

Materials = 12,000 Equivalent unit x $ 6.19 = $ 74,280

Conversion costs = 2400 Equivalent units x $ 7.20 = $ 17,280

Total costs = 776620 + 74280 + 17280 = $ 868,180

Cost to be accounted for
Beginning Work In Progress:
Material	$   168,360.00
Conversion Cost	$      84,834.00	$        253,194.00
Cost incurred during period:
Material	$   264,940.00
Conversion Cost	$   350,046.00	$        614,986.00
Total Cost to be accounted for				$          868,180.00
Cost accounted for
Ending Work In Progress:	Equivalent Units	Cost per Equivalent Units	Cost accounted for
Material	12000	$                     6.19	$      74,280.00
Conversion Cost	2400	$                     7.20	$      17,280.00	$            91,560.00
Units Transferred:	Equivalent Units	Cost per Equivalent Units	Cost accounted for
Material	58000	$                     6.19	$   359,020.00
Conversion Cost	58000	$                     7.20	$   417,600.00	$          776,620.00
Total Cost accounted for				$          868,180.00