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Chapter 16: Q19QS (page 746)

Refer to information in QS 16-18. Using the weighted-average method, assign direct materials costs to the molding department’s output—specifically, the units transferred out to the packaging department and the units that remain in process in the molding department at month-end.

Short Answer

Expert verified

The total cost assigned is$29,100

Step by step solution

01

Meaning of Weighted average.

The weighted mean could be a mean that'scalculated by increasing the weight (or probability) related to a particular eventor result with its related quantitative result and then summing all the items together.

02

Meaning of Direct materials.

Components that go into a manufactured good are known as direct materials.The direct materials utilised in creating a smartphone are the screen, integrated circuits, camera modules, and buttons.

03

Determining cost assignment -Weighted average .

Cost assignment -Weighted average

Direct materials

Cost of units transferred out

Direct materials

$25,500

Costs of ending work-in-process

Direct materials

3,600

Total costs assigned

$29,100

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Most popular questions from this chapter


Question: During May, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 37,500 were in process in the production department at the beginning of May and 150,000 were started and completed in May. May’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to conversion. At the end of May, 51,250 additional units were in process in the production department and were 60% complete with respect to materials and 20% complete with respect to conversion. The production department had \(505,035 of direct materials and \)396,568 of conversion cost charged to it during May. Its beginning inventory included \(74,075 of direct materials cost and \)28,493 of conversion cost.

  • 1.Compute the number of units transferred to finished goods.
  • 2.Compute the number of equivalent units with respect to both materials used and conversion used in the production department for May using the FIFO method.
  • 3.Compute the direct materials cost and the conversion cost per equivalent unit for the department.
  • 4.Using the FIFO method, assign May’s costs to the units transferred to finished goods and assign costs to its ending work in process inventory.

Question: Abraham Company uses process costing to account for its production costs. Conversion is added evenly throughout the process. Direct materials are added at the beginning of the process. During September, the production department transferred 80,000 units of product to finished goods. Beginning work in process consisted of 2,000 units that were 100% complete with respect to direct materials and 85% complete with respect to conversion. Of the units completed, 2,000 were from beginning work in process and 78,000 units were started and completed during the period. Beginning work in process had \(58,000 of direct materials and \)86,400 of conversion cost. At the end of September, the work-in-process inventory consists of 8,000 units that are 25% complete with respect to conversion. The direct materials cost added in September is \(712,000, and conversion cost added is \)1,980,000. The company uses the weighted average method.

Required

  • 1.Determine the equivalent units of production with respect to (a) conversion and (b) direct materials.
  • 2.Compute both the conversion cost and the direct materials cost per equivalent unit.
  • 3.Compute both conversion cost and direct materials cost assigned to (a) units completed and transferred out and (b) ending work in process inventory.

Analysis Component

  • 4.The company sells and ships all units to customers as soon as they are completed. Assume that an error is made in determining the percentage of completion for units in ending inventory. Instead of being 25% complete with respect to conversion, they are actually 75% complete. Write a one-page memo to the plant manager describing how this error affects its September financial statements.

Oslo Company produces large quantities of a standardized product. The following information is available for its production activities for May.

Units

Costs

Beginning work in process inventory

4,000

Beginning work-in-process inventory

Started

12,000

Direct material

2,880

Ending work-in-process inventory

3,000

Conversion

5,358

\(8,238

Status of ending work-in-process inventory

Direct material added

197,120

Material – percent complete

100%

Direct labor added

123,680

Conversion – percent complete

25%

Overhead applied (90% of direct labor)

111,312

Total cost to account for

\)440,350

Ending work in process inventory

$50,610

Prepare a process cost summary report for this company showing costs charged to production, unit cost information, equivalent units of production, cost per EUP, and its cost assignment and reconciliation. Use the weighted-average method.

Refer to the data in Problem 16-4A. Assume that Tamar uses the FIFO method to account for its process costing system. The following additional information is available:

  • Beginning work in process consisted of 3,000 units that were 100% complete with respect to direct materials and 40% complete with respect to conversion.
  • Of the 22,200 units completed, 3,000 were from beginning work in process. The remaining 19,200 were units started and completed during May.

Required

1. Prepare the company’s process cost summary for May using FIFO.

2. Prepare the journal entry dated May 31 to transfer the cost of completed units to finished goods inventory.

For each of the following products and services, indicate whether it is more likely produced in a process operation (P) or in a job order operation (J).

1. Tennis courts

2. Organic juice

3. Audit of financial statements

4. Luxury yachts

5. Vanilla ice cream

6. Tennis balls
See all solutions

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