Process Costing Packaging Department

Direct materials are added 90% at the beginning of the process and the remaining 10% are added when the cereal is 50% complete with the packaging process. Direct labor and overhead are added evenly throughout the process.

Table 8 Unit and cost information

		Cost
	Physical Units	Transferred-in	Direct Materials	Direct Labor	Overhead
Beg WIP	4,000 (40% complete)	$14,300	$720	$347.48	$140
Transferred In	43,964	$170,361.40
End WIP	5,000 (30% complete)

Added during Qtr 1:

Direct Materials -- $14,943.12

Direct Labor 910 hrs @ $11.00 per hour

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

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

4,000+42,964= ? + 5000

42,964 units were completed

2. Compute the equivalent units using the weighted average method

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

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

5. Compute the ending balance in WIP, Packaging