Question

Preparing a Process Costing Production Report (Weighted-Average Method) [LO 3-2, 3-3, 3-4]

Sandia Corporation manufactures metal toolboxes. It adds all materials at the beginning of the manufacturing process. The company has provided the following information:
Units Costs
Beginning work in process (27% complete) 36,000
Direct materials $ 48,000
Conversion cost 105,000
Total cost of beginning work in process $ 153,000
Number of units started 74,000
Number of units completed and transferred to finished goods ?
Ending work in process (52% complete) 89,000
Current period costs
Direct materials $ 91,000
Conversion cost 161,000
Total current period costs $ 252,000
Required:
1 & 2. Using the weighted-average method of process costing, complete each of the following steps:
a. Reconcile the number of physical units worked on during the period.
b. Calculate the number of equivalent units.
c. Calculate the cost per equivalent unit. (Round your answers to 5 decimal places.)
d. Reconcile the total cost of work in process. (Use Cost per Equivalent Unit rounded to 5 decimal places and round your final answers to the nearest whole dollar amount.)

Answer 1

a. Reconciliation of the number of physical units worked on during the period.

As at Beginning 36,000

Units started in current period 74,000

Units to be accounted for 110,000

Transferred out 21,000 Balancing figure

(110,000 - 89,000)

As at end 89,000

Units accounted for 110,000

b. Calculation of equivalent units.

Direct Materials Conversion Costs

Transferred out (A) 21,000 21,000

Units as at end (B) 89,000 89,000

Percentage of completion (C) 100% 52%

Equivalent units as at 31 Dec 89,000 46,280

(D = B * C)

Total equivalent units (A+D) 110,000 67,280

c. Calculation the cost per equivalent unit.

Direct Materials Conversion Total

As at beginning 48000 105000 153000

Added during the period 91000 161000 252000

Costs to be accounted for 139000 266000 405000

Total equivalent units 110,000 67,280

Cost per equivalent unit 1.26364 3.95363 5.21726

Note: Cost per equivalent unit = Costs to be accounted for / Total equivalent units

d. Reconciliation the total cost of work in process.

Direct Materials Conversion Total

Units as at end (A) 89,000 89,000 89,000

Cost per equivalent unit (B) 1.26364 3.95363 5.21726

Percentage of completion (C) 100% 52%

Total cost (A*B*C) 112,464 182,974 295,437

Cost of closing WIP = Costs to be Accounted for - Costs Transferred Out

= 405000 - (21000 units * 5.21726)

= 405,000 - 109,562.46

= 295437.54

= $295,4378