Passera Inc. manufactures a single product in a continuous processing environment. All materials are added at the beginning of the process, and conversion costs are applied evenly throughout the process. To assign costs to inventories, the company uses weighted-average process costing.
The following information was available for 2012:
Sales (selling price per unit, $40) ..............................................$4,080,000
Actual manufacturing overhead ...................................................660,000
Selling and administrative expenses................................................328,000
Unit costs of production:
Direct materials (1 kilogram) ....................................................... $ 6.00
Direct labour (1/2 hour) ................................................................8.00
Overhead .................................................................................9.00
Total ....................................................................................$23.00
Units transferred to finished goods .........................................140,000 units
Materials purchased .....................................................125,000 kilograms
Materials used in process ................................................136,000 kilograms
An inventory count at year end (December 31, 2012) revealed that the inventories had the following balances:
Raw materials ...................................8,000 kilograms
Work in process (45% complete) .................22,000 units
Finished goods ......................................45,000 units
The January 1, 2012, work in process units are 70% complete. The unit cost of production was the same in 2012 as it was in 2011.
Instructions
Calculate the following amounts for Passera Inc.:
(a) The opening (January 1, 2012) balance in units and costs of (1) raw materials, (2) work in process, and (3) finished goods
(b) The equivalent units for 2012 for (1) materials and (2) conversion costs
(c) The total cost for 2012 for (1) materials used and (2) conversion applied
(d) The cost of ending work in process for 2012
(e) The cost of units completed and transferred to finished goods