In: Accounting
The following data pertain to the Vesuvius Tile Company for July.
Work in process, July 1 (in units) .......................................................................................................................20,000
Units started during July ...................................................................................................................................?
Total units to account for ..................................................................................................................................65,000
Units completed and transferred out during July ................................................................................................?
Work in process, July 31 (in units) .....................................................................................................................15,000
Total equivalent units: direct material .................................................................................................................65,000
Total equivalent units: conversion ......................................................................................................................?
Work in process, July 1: direct material .............................................................................................................$164,400
Work in process, July 1: conversion ...................................................................................................................?
Costs incurred during July: direct material .........................................................................................................?
Costs incurred during July: conversion ..............................................................................................................659,400
Work in process, July 1: total cost .....................................................................................................................244,200
Total costs incurred during July .........................................................................................................................1,031,250
Total costs to account for ..................................................................................................................................1,275,450
Cost per equivalent unit: direct material .............................................................................................................8.25
Cost per equivalent unit: conversion ..................................................................................................................?
Total cost per equivalent unit ............................................................................................................................21.45
Cost of goods completed and transfered out during July ......................................................................................?
Cost remaining in ending work-in-process inventory: direct material ...................................................................?
Cost remaining in ending work-in-process inventory: conversion .........................................................................79,200
Total cost of July 31 work in process .................................................................................................................202,950
Additional Information:
a. Direct material is added at the beginning of the production process, and conversion activity occurs uniformly throughout the process.
b. The company uses weighted-average process costing.
c. The July 1 work in process was 30 percent complete as to conversion.
d. The July 31 work in process was 40 percent complete as to conversion.
Problem 4–27 Missing Data; Production Report; Weighted-Average (LO 4, 5, 6)
Cost remaining in ending work-in-process inventory, direct material: $123,750
Total cost of July 31 work in process: $202,950
Chapter 4 Process Costing and Hybrid Product-Costing Systems 159
Required: Compute the missing amounts, and prepare the firm’s July production report
Solution:
Unit started in July = Total units to be accounted for - Units in beinning WIP = 65000 - 20000 = 45000
Units completed and transferred out = Total units to be accounte for - Units in ending WIP = 65000 - 15000 = 50000 units
Cost per equivalent unit of direct material = $8.25
Total equivalent unit of direct material = 65000
Total cost of direct material = 65000 * $8.25 = $536,250
Cost of direct material in beginning WIP = $164,400
Direct material cost incurred in july = $536,250 - $164,400 = $371,850
Total cost per equivalent unit = $21.45
Cost per equivalent unit for conversion = $21.45 - $8.25 = $13.20
Total cost to be accounted for = $1,275,450
Conversion cost to be accounted for = $1,275,450 - $536,250 = $739,200
Equivalent units of conversion = $739,200 / $13.20 = 56000 units
Conversion cost included in beginning WIP = $244,200 - $164,400 = $79,800
Computation of Equivalent unit of Production - Weighted Average | |||
Particulars | Physical Units | Material | Conversion |
Unit completed & Transferred out | 50000 | 50000 | 50000 |
Closing WIP: | 15000 | ||
Material (100%) | 15000 | ||
Conversion (40%) | 6000 | ||
Equivalent units of production | 65000 | 65000 | 56000 |
Computation of Cost per equivalent unit of Production - Weighted Average | ||
Particulars | Material | Conversion |
Opening WIP | $164,400.00 | $79,800.00 |
Cost Added during July | $371,850.00 | $659,400.00 |
Total cost to be accounted for | $536,250.00 | $739,200.00 |
Equivalent units of production | 65000 | 56000 |
Cost per Equivalent unit | $8.25 | $13.20 |
Computation of Cost of ending WIP and units completed & transferred out - Weighted Average | |||
Particulars | Material | Conversion | Total |
Equivalent unit of Ending WIP | 15000 | 6000 | |
Cost per equivalent unit | $8.25 | $13.20 | |
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit) | $123,750 | $79,200 | $202,950 |
Units completed and transferred | 50000 | 50000 | |
Cost of units completed & Transferred (Unit completed * cost per equivalent unit) | $412,500 | $660,000 | $1,072,500 |
Cost reconciliation - Weighted Average | |
Particulars | Amount |
Costs to be accounted for: | |
Cost of beginning WIP inventory | $244,200.00 |
Cost added to production | $1,031,250.00 |
Total Cost to be accounted for | $1,275,450.00 |
Costs accounted for as follows: | |
Cost of unit transferred out | $1,072,500 |
Ending WIP: | |
Material | $123,750 |
Converison | $79,200 |
Total cost accounted for | $1,275,450 |