Question

Weighted Average Process Costing

Minot Processing Company manufactures one product on a continuous basis in two departments, Processing and Finishing. All materials are added at the beginning of work on the product in the Processing Department. During November, the following events occurred in the Processing Department:

Units started	20,000 units
Units completed and transferred to Finishing Department	21,000 units

Costs assigned to processing
Raw materials (one unit of raw materials for each unit of product started)	$350,000
Manufacturing supplies used	25,000
Direct labor costs incurred	182,000
Supervisors' salaries	15,000
Other production labor costs	18,000
Depreciation on equipment	12,000
Other production costs	95,000

Additional information follows:

• Minot uses weighted average costing and applies manufacturing overhead to Work-in-Process at the rate of 90% of direct labor cost.
• Ending inventory in the Processing Department consists of 3,000 units that are one-fourth converted
• Beginning inventory contained 4,000 units, one-half converted, with a cost of $57,950 ($34,000 for materials and $23,950 for conversion).

• Cost of Production Report
• Work-in-Process Analysis

(a) Prepare a cost of production report for the Processing Department for November.

• Do not use negative signs with any of your answers.
• Round Cost per equivalent unit in process to two decimal places, if needed.

Processing Department Cost of Production Report For the Month of November
Summary of units in process:
Beginning		Answer
Units started		Answer
In process		Answer
Completed		Answer
Ending		Answer
Equivalent units in process:			Materials	Conversion	Total
Units completed			Answer	Answer
Plus equivalent units in ending inventory			Answer	Answer
Equivalent units in process			Answer	Answer
Total cost to be accounted for and cost per equivalent unit in process:
Beginning work-in-process			Answer	Answer	Answer
Current costs			Answer	Answer	Answer
Total cost in process			Answer	Answer	Answer
Equivalent units in process			Answer	Answer
Cost per equivalent unit in process			Answer	Answer	Answer
Accounting for total costs:
Transferred out					Answer
Ending work-in-process:
Materials				Answer
Conversion				Answer	Answer
Total cost accounted for Work-in-Process Analysis (b) Prepare an analysis of all changes in Work-in-Process. Do not use negative signs with any of your answers. Work-in-process: Answer Beginning Current manufacturing costs: Direct materials Answer Direct labor Answer Applied overhead Answer Answer Total Answer Cost of goods manufactured Answer Ending Answer

Answer 1

a.

Processing Department
Cost of Production Report
For the Month of November
Summary of units in process:
Beginning	4000
Units started	20000
In process	24000
Completed	21000
Ending	3000
Equivalent units in process:		Materials	Conversion	Total
Units completed		21000	21000
Plus equivalent units in ending inventory (3000 x 1/4)		3000	750
Equivalent units in process		24000	21750
Total cost to be accounted for and cost per equivalent unit in process:
Beginning work-in-process		34000	23950	57950
Current costs*		350000	345800	695800
Total cost in process		384000	369750	753750
Equivalent units in process		24000	21750
Cost per equivalent unit in process		16.00	17.00	33.00
Accounting for total costs:
Transferred out				693000
Ending work-in-process:
Materials			48000
Conversion			12750	60750
Total cost accounted for				753750

*Current costs for conversion = Direct labor cost + Manufacturing overhead (100% of direct labor cost) = $182000 + (90% x $182000) = $182000 + $163800 = $345800

b. Analysis of all changes in Work-in-Process:

Work-in-process:		57950
Beginning Current manufacturing costs:
Current manufacturing costs:
Direct materials	350000
Direct labor	182000
Applied overhead	163800	695800
Total		753750
Cost of goods manufactured		693000
Ending		60750