Question

The Company uses a single department production process. Materials are added at the start of the production process and labor and overhead are added as indicated. For January 2018, the Company records have the following information:

UNITS:
Beginning WIP:                                                                                                          10,000 units

100% complete for materials, 50% complete for labor; 3% complete for overhead

Units started in process                                                                                               50,000 units

Units completed                                                                                                          49,000 units

Ending WIP:                                                                                                             11,000 units

100% complete for materials, 60% complete for labor; 20% complete for overhead

PRODUCTION COSTS:

Work in Process, Beginning of the Month:
Materials                                          $ 22,000
Labor                                                   18,000
Overhead                                            11,000             51,000

Current Month Costs:
Materials                                          $ 320,000
Labor                                                   180,160
Overhead                                            152,840           653,000

                                    Total Costs:                        $   704,000

Prepare a Cost of Production Summary using the weighted average method (calculations for equivalent units of production, cost per equivalent unit of production, total cost for units completed and WIP, ending). Prepare your calculations for Materials, Labor, and Overhead separately. Prepare the appropriate journal entries at month end.

Answer 1

		physcial units	Material	Labor	overhead
	Beginning WIP	10000	100%	50%	3%
	unit started in production	50000
	Units completed	49000
	Ending WIP	11000	100%	60%	20%
			Material	Labor	overhead
A	Cost of beginning WIP		22000	18000	11000
B	Costs incurred during the month		320000	180160	152840
C	Total cost incurred (A+B)		342000	198160	163840
		physical units	Material	Labor	overhead
A	Units completed	49000	49000	49000	49000
B	Ending WIP	11000	11000	6600	2200
C	Total Equivalent units(A+B)	60000	60000	55600	51200
	Computation of equivalent unit cost for all expenses
			Material	Labor	overhead
A	Total costs incurred done to date		342000	198160	163840
B	Total Equivalent units (Given)		60000	55600	51200
C	Equivalent cost per unit (A/B)		5.70	3.56	3.20
Calcualation of equivalent cost per unit and assign cost to the units completed and units Ending WIP
			Material	Labor	overhead
A	Equivalent cost per unit		5.70	3.56	3.20
B	units completed and transferred out		49000	49000	49000
C	Cost assign to completed units (A*B)		279300	174637.4	156800
D	WIP, Ending Equivalent units		11000	6600	2200
E	Cost assign to WIP, Ending units (D*A)		62700	23522.59	7040

journal entries -

	Dr.	Cr.
WIP	653000
To Raw material inventory		320000
To Labor		180160
To Factory overhead		152840
Finished goods inventory	610737
TO WIP		610737

Please commnent in case of further clarification required/wrong answer.