Question

A B с D E 1 9 Hayword, Inc. uses weighted average costing and has two departments - mixing and packaging. 2 The following information relates to work in the mixing department for the month of July: 3 4 Work in process, July 1: 5 Units in process 300 6 Percent completed with respect to materials 60% 7 Percent completed with respect to conversion 40% 8 Cost in the beginning inventory: Materials cost $10,500 10 Conversion cost $6,750 11 Units started into production during the period 6,200 12 Costs added to production during the period: 13 Materials cost $330,912 14 Conversion cost $406,408 15 Work in process, July 31: 16 Units in process 450 17 Percent completed with respect to materials 40% 18 Percent completed with respect to conversion 30% 19 20 Use the data to answer the following. 21 22 1. Compute equivalent units. 23 Mixing Department 24 Equivalent Units of Production

Answer 1

1) Compute equivalent units

              Calculate the equivalent units of production

Particular	Materials	Conversion
Units transferred for the next department	6050	6050
Ending working process:
Materials	180
conversion		135
Equivalent units of production	6230	6185

Calculations

            Units transferred for the next department = 6050*100% = 6050

                        Materials = 450*40% = 180

Conversion = 450*30% = 135

       

                        Calculate units completed and transferred

Particulars	units
Units of beginning working process	300
Units started into production	6200
Total units available	6500
Less: units of closing working process	450
Units completed and transferred	6050

2) Calculate cost per equivalent units

Calculate cost per equivalent products

Particular	Materials	conversion
Cost of beginning working process	$10500	$6750
Cost added during the period	$330912	$406408
Total cost	$341412	$413158
Equivalent units of production	6230	6185
Cost per equivalent units	$54.80	$66.80

Cost per equivalent units = Total cost/ Equivalent units of production

            Materials        =          341412/6230 = 54.80

            Conversion     =          413158/6185 = 66.80

3) Assign cost

Costs of ending working process inventory and units transferred out

Particulars	Materials	Conversion	total
Ending working process inventory
Equivalent units of production	180	135
Cost per equivalent unit	$54.80	$66.80
Cost of ending working process inventory	$9864	$9018	$18882
Units completed and transferred out
units transferred to the next department	6050	6050
Cost per equivalent unit	$54.80	$66.80
Cost of unit transferred out	$331540	$404140	$735680

4) Prepare reconciliation

                        Cost reconciliation

Particulars	Amount ($)
Cost to be accounted for:
Cost of beginning working process inventory	$17250
Cost added to production during the period	$737320
Total cost to be accounted for	$754570
Cost accounted for as follows:
Costs of ending working process inventory	$18882
Cost of units transferred out	$735688
Total cost accounted for	$754570

Calculations   

            Cost of beginning working process inventory = 10500 + 6750 = 17250

            Cost added to production during the period     = 330912 + 406408 = 737320