Question

2 .Equivalent Units; Cost Reconciliation-Weighted Average Method Helox, Inc., manufactures a product that passes through two production processes. A quantity schedule for the month of May for the first process follows: Schedule and E Schedwle Units to be accounted for Work in process, May 1 (materials 100% complete: labor and overhead 40% complete) 5,000 80,000 Started into otal units units Materials Labor Overhend Units accounted for as follows: Transferred to the next department ! 175,000 | Work in process, May 31 (materials ? 100% complete, labor and overhead 30% otal units e Unir Whole Total Materials Labor Overhead ost to be accounted for Work in Cost added by the otal cost (a 406,000 54,000 11,20040,800 valent units (b) ost per EU. valent units Total cost MaterialsLabor Overhead ost accounted for as follows: Trans ferred to the next department: (Punits X Sper Work in process. N Materials, at per EU r EU Overhead, at Total work in otal Cost accounted for EU Regnired: (1). Assume that the company uses the weighted-average method of accounting for units and costs. Determine the equivalent units for the month for the first processing department (2). Compute the costs per equivalent unit for the month for the first process (3). Complete the "Cost Reconciliation" part of the production report for the first processing department.

Answer 1

Answer

• All working forms part of the answer
• ALL requirements, as asked:

Quantity Schedule & Equivalent units
Units to be accounted for:
WIP May 1	5,000
Started into production	180,000
Total units	185,000	Equivalent units
Units accounted for as follows:		Material	Labor	Overhead
Transferred to next department [100% complete]	175,000	175,000	175,000	175,000
WIP May 31	10,000	10,000	3,000 [10000 x 30%]	3,000 [10000 x 30%]
Total units	185,000	185,000	178,000	178,000

Cost per Equivalent units
	Total cost	Material	Labor	Overhead	Whole units
Cost to be accounted for:
WIP May 1	$                   5,500	$                 1,500	$                 2,400	$                 1,600
Cost added by the department	$              406,000	$               54,000	$            211,200	$             140,800
Total costs	$              411,500	$               55,500	$           213,600	$             142,400
Equivalent units		185,000	178,000	178,000
Cost per EU		$                    0.30	$                   1.20	$                    0.80	$                   2.30

		Equivalent units
Cost Reconciliation	Total costs	Materials	Labor	Overhead
Cost accounted for as follows:
Transferred to next department [175000 units at $ 2.30]	$              402,500
WIP May 31:
Material at $ 0.30 per EU	$                   3,000	10,000 [10000 x $ 0.30]
Labor at $ 1.2 per EU	$                   3,600		3,000 [3000 x $1.20]
Overhead at $ 0.8 per EU	$                   2,400			3,000 [3000 x $ 0.80]
Total WIP May 31	$                   9,000
Total cost accounted for	$              411,500