Question

Betty DeRose, Inc. operates two departments, the handling department and the packaging department. During April, the handling department reported the following information: % complete DM % complete conversion 71% 38% nail 1 work in process, April 1 units started during April work in process, April 30 units 18,000 80,000 44,000 28% 74% The cost of beginning work in process and the costs added during April were as follows: work in process, April 1 costs added during April total costs DM $ 64,996 190,336 255,332 Conversion $152,785 232,407 385,192 Total cost $217,781 422,743 640,524 Calculate the total cost of the handling department's work in process inventory at April 30 using the weighted average process costing method.

Answer 1

Solution:

Betty Derose Inc.
Production Cost report - Handling Department
Computation of Equivalent unit of Production
Particulars	Physical Units	Material	Conversion
Units to account for:
Beginning WIP	18000
Started into Production	80000
Total units to account for	98000
Units accounted for:
Unit completed & Transferred out	54000	54000	54000
Units in ending inventory:	44000
Material (28%)		12320
Conversion (74%)			32560
Equivalent units of production	98000	66320	86560

Betty DeRose Inc. Computation of Cost per equivalent unit - Handling department
Particulars	Material	Conversion	Total
Opening WIP	$64,996	$152,785	$217,781
Cost Added during Period	$190,336	$232,407	$422,743
Total cost to be accounted for	$255,332	$385,192	$640,524
Equivalent units of production	66320	86560
Cost per Equivalent unit	$3.85	$4.45

Betty DeRose Inc. Computation of Cost of ending WIP and units completed & transferred out - Handling Department
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	12320	32560
Cost per equivalent unit	$3.85	$4.45
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$47,432	$144,892	$192,324
Units completed and transferred	54000	54000
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$207,900	$240,300	$448,200