Exercise 1612 Weighted average Completing a process cost sum

Exercise 16-12 Weighted average: Completing a process cost summary LO C3 The following partially completed process cost summary describes the July production activities of Ashad Company. Its production output is sent to its warehouse for shipping. All direct materials are added to products when processing begins. Beginning work in process inventory is 20% complete with respect to conversion. Direct Materials Conversion Equivalent Units of Production Units transferred out Units of ending work in process 32,50032,500 1,560 2,600 Equivalent units of production 35,100 34,060 Direct Materials Conversion Costs per EUP Costs of beginning work in process Costs incurred this period $19,000 2,325 402.200 181,599 Total costs $ 421,200 183,924 Units in beginning work in process (all completed during July) Units started this period Units completed and transferred out Units in ending work in process 2,100 33,000 32,500 2,600

Solution

Answer:

Costs Charged to Production

Costs of beginning goods in process

$21,325.00

Costs incurred this period

583,799.00

Total costs to account for

$605,124.00

Total costs accounted for

605,124.00

*Difference due to rounding cost/unit

$0.00

Unit reconciliation

Units to account for

Beginning goods in process

2,100

Units started this period

33,000

Total units to account for

35,100

Total units accounted for

Completed and transferred out

32,500

Ending goods in process

2,600

Total units accounted for

35,100

Equivalent units of production (EUP)- weighted average method

Units

% Materials

EUP- Materials

% Overhead

EUP- Overhead

Units completed and transferred out

32,500

100%

32,500

100%

32,500

Units of ending goods in process

2,600

100%

2,600

60%

1,560

Equivalent units of production

35,100

35,100

34,060

Cost per EUP

Materials

Overhead

Cost of beginning goods in process

$19,000

$2,325

Costs incurred this period

402,200

181,599

Total costs

Costs

$421,200

Costs

$183,924

÷  Equivalent units of production

EUP

35,100

EUP

34,060

Cost per equivalent unit of production

$12.00

$5.40

Cost Assignment and Reconciliation

Costs transferred out

EUP

Cost per EUP

Total cost

Direct materials

32,500

$12.00

$390,000.00

Factory overhead

32,500

$5.40

175,500.00

Total transferred out

565,500.00

Costs of ending goods in process

EUP

Cost per EUP

Total cost

Direct materials

2,600

$12.00

$31,200.00

Factory overhead

1,560

$5.40

8,424.00

Total ending goods in process

39,624.00

Total costs accounted for

605,124.00

Costs Charged to Production
Costs of beginning goods in process	$21,325.00
Costs incurred this period	583,799.00
Total costs to account for	$605,124.00
Total costs accounted for	605,124.00
*Difference due to rounding cost/unit	$0.00
Unit reconciliation
Units to account for
Beginning goods in process	2,100
Units started this period	33,000
Total units to account for	35,100
Total units accounted for
Completed and transferred out	32,500
Ending goods in process	2,600
Total units accounted for	35,100
Equivalent units of production (EUP)- weighted average method
	Units	% Materials	EUP- Materials	% Overhead	EUP- Overhead
Units completed and transferred out	32,500	100%	32,500	100%	32,500
Units of ending goods in process	2,600	100%	2,600	60%	1,560
Equivalent units of production	35,100		35,100		34,060
Cost per EUP			Materials		Overhead
Cost of beginning goods in process			$19,000		$2,325
Costs incurred this period			402,200		181,599
Total costs		Costs	$421,200	Costs	$183,924
÷  Equivalent units of production		EUP	35,100	EUP	34,060
Cost per equivalent unit of production	$12.00		$5.40
Cost Assignment and Reconciliation
Costs transferred out	EUP	Cost per EUP	Total cost
Direct materials	32,500	$12.00	$390,000.00
Factory overhead	32,500	$5.40	175,500.00
Total transferred out				565,500.00
Costs of ending goods in process	EUP	Cost per EUP	Total cost
Direct materials	2,600	$12.00	$31,200.00
Factory overhead	1,560	$5.40	8,424.00
Total ending goods in process				39,624.00
Total costs accounted for				605,124.00