The Smith Processing Company had work in process at the beginning and end of March 2017 in
Question:
The
Smith
Processing Company had work in process at the beginning and end of March 2017 in its Painting Department as follows:
Percentage of Completion | ||
---|---|---|
Direct Materials | Conversion Costs | |
March 1 (4,600 units) | 40% | 10% |
March 31 (50,000 units) | 65% | 15% |
The company completed
30,000
units during March. Manufacturing costs incurred during March were direct materials costs of
$300,000
and conversion costs of
$450,000.
Inventory at March 1 was carried at a cost of
$35,000
(direct
materials—$5,000
and conversion
costs—$30,000).
Assuming
Smith
uses weighted-average costing, determine the equivalent units of work done in March, and calculate the cost of units completed and the cost of units in ending inventory.
Begin by entering the physical units first, then calculating the equivalent units.
Physical | |
Flow of Production | Units |
Work in process beginning | 4600 |
Started during current period | 75400 |
To account for | 80000 |
Completed and transferred out during current period | 30000 |
Work in process, ending | 50000 |
Accounted for | 80000 |
Equivalent units of work done to date |
Equivalent Units | |
Direct | Conversion |
Materials | Costs |
30000 | 30000 |
32500 | 17500 |
62500 | 47500 |
Next, summarize the total costs to account for.
Total | Direct | Conversion | ||
Production Costs | Materials | Costs | ||
Work in process, beginning | 35000 | 30000 | 5000 | |
Costs added in current period | 750000 | 300000 | 450000 | |
Total costs to account for | 785000 | 330000 | 455000 |
Now calculate cost per equivalent unit for direct materials and conversion costs. (Round your answer to the nearest cent.)
Direct | Conversion | ||
Materials | Costs | ||
Costs incurred to date | 330000 | 455000 | |
Divide by | equivalent units of work done to date | 63500 | 47500 |
Cost per equivalent unit | 5.20 | 9.58 |
Finally, assign total costs to units completed (and transferred out) and to units in ending work in process.
Total | Direct | Conversion | ||
Production Costs | Materials | Costs | ||
Completed and transferred out | ||||
Work in process, ending | ||||
Total costs accounted for | 785000 | 330000 | 455000 |
Accounting
ISBN: 978-0324401844
22nd Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac