Question

	Revised Problem 4-29
	Moravia Company processes and packages cream cheese.
	The following data have been compiled for the month of June. Conversion activity
	occurs uniformly throughout the production process.
	Work in process, June 1 - 60,000 units:
	Direct material: 100% complete cost of				110,000
	Conversion: 30% complete, cost of				43,000
	Balance in work in process, June 1				153,000
	Units started during June				180,000
	Units completed during June and transferred out to finished-goods inventory				210,000
	Work in process, June 30:
	Direct material: 100% complete
	Conversion: 80% complete
	Costs incurred during June:
	Direct material				420,000
	Conversion costs:
	Direct labor				93,250
	Applied manufacturing overhead				283,400
	Total conversion costs				376,650
	Required: Prepare schedules to accomplish each of the following process-costing steps for the month
	of June. Use the weighted-average method of process costing.
	1. Analysis of physical flow of units.
	2. Calculation of equivalent units.
	3. Computation of units costs.
	4. Analysis of total costs.
	5. Construct an Excel spreadsheet and show all of the preceding requirements
	Show how the solution would change if the following data change: June 1 work-in-process
	costs were $84,000 for direct material and $26,000 for conversion.

Answer 1

• All requirements forms part of the answer
• Requirement 1

Units Reconciliation
Units to account for:
Beginning WIP	60,000
Units started this period	180,000
Total Units to account for	$       240,000.00
Total Units accounted for:
Completed & Transferred out	210,000
Ending WIP	30,000
Total Units accounted for	$       240,000.00

• Requirement 2

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	210,000	100%	210,000	100%	210,000
Units of ENDING WIP	30,000	100%	30,000	80%	24,000
Equivalent Units of Production			240,000		234,000

• Requirement 3

COST per EUP			Material		Conversion
Cost of Beginning WIP			$      110,000.00		$          43,000.00
Cost incurred during the period			$      420,000.00		$        376,650.00
Total Costs		Costs	$      530,000.00	Costs	$        419,650.00

Total Cost to account for:
Cost of beginning WIP	$       153,000.00
Costs incurred this period	$       796,650.00
Total Cost to account for	$       949,650.00

• Requirement 4

TOTAL COST ACCOUNTED FOR
Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	210,000	$       2.21	$      464,100.00
- Conversion	210,000	$       1.79	$      375,900.00
Total Cost transferred Out				$            840,000.00
Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	30,000	$       2.21	$        66,300.00
- Conversion	24,000	$       1.79	$        42,960.00
Total cost of ending WIP				$            109,260.00
Total costs accounted for					$        949,260.00

• Requirement 5

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	210,000	100%	210,000	100%	210,000
Units of ENDING WIP	30,000	100%	30,000	80%	24,000
Equivalent Units of Production			240,000		234,000
COST per EUP			Material		Conversion
Cost of Beginning WIP			$        84,000.00		$          26,000.00
Cost incurred during the period			$      420,000.00		$        376,650.00
Total Costs		Costs	$      504,000.00	Costs	$        402,650.00
Equivalent units of production		EUP	240,000	EUP	234,000
Cost per EUP			$                   2.10		$                     1.72

Total Cost to account for:
Cost of beginning WIP	$       110,000.00
Costs incurred this period	$       796,650.00
Total Cost to account for	$       906,650.00
Total costs accounted for [calculated below]	$       906,480.00
Difference due to rounding cost/unit	$                170.00

TOTAL COST ACCOUNTED FOR
Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	210,000	$       2.10	$      441,000.00
- Conversion	210,000	$       1.72	$      361,200.00
Total Cost transferred Out				$            802,200.00
Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	30,000	$       2.10	$        63,000.00
- Conversion	24,000	$       1.72	$        41,280.00
Total cost of ending WIP				$            104,280.00
Total costs accounted for					$        906,480.00