Question

Braun Company produces its product through a single processing department. Direct materials are added at the beginning of the process. Conversion costs are added to the product evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing. The Work in Process Inventory account had a balance of \(21,300 on November 1, which consisted of \)6,800 of direct materials and \(14,500 of conversion costs.

During the month, the company incurred the following costs:

Direct materials	\) 116,400
Conversion	1,067,000

During November, the company started 104,500 units and transferred 100,000 units to finished goods. At the end of the month, the work in process inventory consisted of 12,000 units that were 100% complete with respect to direct materials and 25% complete with respect to conversion.

Required

1. Prepare the company’s process cost summary for November using the weighted-average method.
2. Prepare the journal entry dated November 30 to transfer the cost of the completed units to finished goods inventory

Short answer

1. Total cost accounted for $1,204,700.
2. Finished goods = $1,160,000

Step-by-step solution

Meaning of Work-in-Process

Work in progress refers to those products or goods that are not completely manufactured but are in the manufacturing process.

(1) Preparing the company’s process cost summary for November

Production Cost Report
Processing Department For the month of November
	The flow of Physical Units	Direct Materials	Conversion Cost
Units accounted for:
Completed and transferred out during November	100,000	100,000	100,000
Add: Ending work-in-process, November 30	12,000	12,000	3,000
Total physical units accounted for	112,000
Total equivalent unit		112,000	103,000

	Direct Materials	Conversion Costs	Total
Beginning work-in-process, November 01	$6,800	$14,500	$21,300
Add: Cost added during November	$116,400	$1,067,000	$1,183,400
Total costs to account for	$123,200	$1,081,500	$1,204,700

	Direct Materials	Conversion Costs
Total costs to account for	123,200	1,081,500
Divided by: Total equivalent units	112,000	103,000
Cost per equivalent unit	$1.10	$10.50

	Direct Materials	Conversion Costs	Total
Completed and transferred out:
Equivalent units completed and transferred out:	100,000	100,000
Multiply by: Cost per equivalent unit	$1.10	$10.50
The cost assigned to units completed and transferred out	$110,000	$1,050,000	$1,160,000
Ending work-in-process
Equivalent units in ending inventory	12,000	3,000
Multiply by: Cost per equivalent unit	$1.10	$10.50
The cost assigned to units in ending work-in-process	$13,200	$31,500	$44,700
Total costs accounted for	Total cost		$1,204,700

(2) Preparing journal entries

Date	Particulars	Debit ($)	Credit ($)
	Finished Goods	1,160,000
	Work-in-Process		1,160,000