Question

Problem 3-4A Weighted average: Process cost summary, equivalent units, cost estimates LO C2, C3, P4 [The following information applies to the questions displayed below.] Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 22,200 units of product to finished goods inventory. Its 3,000 units of beginning work in process consisted of $19,800 of direct materials and $221,940 of conversion costs. It has 2,400 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $496,800 of direct material costs and $2,165,940 of conversion costs were charged to production. Prepare the company's process cost summary for May using the weighted-average method

Answer 1

Direct Material Conversion

Units completed and transferred 22,200 22,200

Closing inventory units

(Material 100% complete) 2,400

(Conversion 80% complete) 1920(2400*80%)

Total equivalent units 24,600 24,120

TOTAL COST PER UNIT

Cost in opening inventory(A) 19,800 221,940

Cost in the period (B) 496,800 2,165,940

Total cost (A+B) 516,600 2,387,880

Equivalent units(C) 24,600 24,120

cost per equivalent units (A+B)/C 21 99

COST SUMMARY $

Cost of finished goods:

Material (22,200*21) 466,200

Conversion cost (22,200*99) 2,197,800

Cost of closing units

Material (2,400*21) 50,400

Conversion cost (1,920*99) 190,080

Total cost 2,904,480