Process Costing - Packaging Department

Direct materials are added 90% at the beginning of the process and the remaining 10% are added when the cookies are 80% complete with the packaging process. Direct labor and overhead are added evenly throughout the process.

Table 8 - Unit and cost information

Cost Physical UnitsTransferred-inDirect MaterialsDirect LaborOverheadBeg WIP

24,000

(80% complete)

$171,000

$21,200$20,167.60$1382.40Transferred In420,000

$3,345,480

End WIP

26,000

(75% complete)

Added during Qtr 2:

Direct Materials -- $402,544

Direct Labor - 26,000 hrs @ $18.50 per hour

Overhead - OH is applied based on predetermined OH rate and actual DL hours

1. Determine the number of units completed during quarter 2.

1. Compute the equivalent units using the weighted average method.

1. Compute the cost per equivalent unit using the weighted average method

1. Compute the cost of goods transferred to finished goods inventory

1. Compute the ending balance in WIP, Packaging

Table 9 - Actual Results (calculate revenue and COGS)

Units soldSales PriceRevenue

Units soldCost per unitCOGS