Question

Piscataway Plastics Company manufactures a highly specialized plastic that is used extensively in the automobile industry. The following data have been compiled for the month of June. Conversion activity occurs uniformly throughout the production process.

Work in process, June 1—40,000 units:
Direct material: 100% complete, cost of	$	155,500
Conversion: 40% complete, cost of		25,200
Balance in work in process, June 1	$	180,700
Units started during June		200,000
Units completed during June and transferred out to finished-goods inventory		190,000
Work in process, June 30:
Direct material: 100% complete
Conversion: 60% complete
Costs incurred during June:
Direct material	$	492,500
Conversion costs:
Direct labor	$	87,200
Applied manufacturing overhead		261,600
Total conversion costs	$	348,800

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 unit costs.

4. Analysis of total costs.

Answer 1

1) Analysis of Physical flow of units
Particulars			Physical unit
Work in process june 1			40000
unit started during june			200000
Total units to account for			240000
unit completed & transferred out			190000
Work in process june 30			50000
Total units to account for			240000
2) Calculation of equivalent units
Particulars			Physical unit	Direct material	%	Conversion	%
Unit completed & transferred			190000	190000	100%	190000	100%
Work in process june 30			50000	50000	100%	30000	60%
Total equivalent units			240000	240000		220000
3) Computation of unit cost
Particulars			Direct material	Conversion cost	total
work in process june 1			155500	25200	180700
cost incurred during june			492500	348800	841300
total cost to account for (1)			648000	374000	1022000
equivalent unit (2)			240000	220000
cost per equivalent unit (1)/(2)			2.7	1.7	4.40
4) Analysis of total costs
cost of goods completed & transferred (190000*4.40)				836000
Direct material (50000*2.7)				135000
conversion (30000*1.7)				51000
total cost accounted for				1022000