Question: Rigby Ltd accumulates costs for its single product using process costing. Direct material is added at the beginning of the production process, and conversion activity
Rigby Ltd accumulates costs for its single product using process costing. Direct material is added at the beginning of the production process, and conversion activity occurs uniformly throughout the process. The following is a partially completed production report for May.
Production report, May
Physical
units
Percentage of
completion with respect
to conversion
Equivalent units
Direct materials
Conversion
Work in process, 1 May
25,000
40%
Units started during May
30,000
55,000
Units completed and transferred out during May
35,000
35,000
35,000
Work in process, 31 May
20,000
80%
20,000
16,000
Total units accounted for
55,000
Direct material
Conversion
Total
Work in process, 1 May
$143,000
$474,700
$617,700
Costs incurred during May
$165,000
$2,009,000
$2,174,000
Total costs to account for
$308,000
$2,483,700
$2,791,700
Required:
a) Complete the following process costing steps using the weighted average method:
i Calculation of equivalent units.
ii Calculation of unit costs.
iii Analysis of total costs.
b) Prepare journal entry to record the transfer of the cost of goods completed and transferred out during May.
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