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	24,000
Stage of completion for materials	80%
Stage of completion for labor and overhead	30%
Costs in work in process inventory:
Materials	$172,460
Labor	68,900
Overhead	141,300
Total costs in beginning work in process	$382,660
Units started into production in January	71,000
Units completed and transferred in January	74,000
Costs added to production:
Materials	$378,605
Labor	690,080
Overhead	1,383,160
Total cots added into production in January	$2,451,845
Work in process ending
Units in process	21,000
Stage of completion for materials	75%
Stage of completion for labor and overhead	20%

Instructions:

Prepare a production cost report for Waterways using the weighted-average method.

Answer 1

Prepare production cost report :

	Physical unit	Direct material	Conversion
Units to account for
Beginning work in process	24000
Units transferred in	71000
Total units to account for	95000
Units accounted for
Units transferred out	74000	74000	74000
Ending work in process	21000	15750	4200
Total Units	95000
Equivalent unit of direct material		89750
Equivalent unit of conversion			78200
Total units to accounted for	95000	89750	78200
Cost information
		Direct material	Conversion	Total
Beginning work in process		172460	210200	382660
Cost added		378605	2073240	2451845
Total cost		551065	2283440	2834505
Equivalent unit of production		89750	78200
Cost per equivalent unit		6.14	29.20
Cost accounted for
Cost of units transferred out				2615160
Cost of ending work in process
Material		96705
Conversion			122640
Total cost of ending work in process				219345
Total cost accounted				2834505