Problem 4-25 Step-by-Step Weighted-Average Process Costing (LO 4-3, 4-4, 4-5) [T

Question

Problem 4-25 Step-by-Step Weighted-Average Process Costing (LO 4-3, 4-4, 4-5)

[The following information applies to the questions displayed below.]

Timing Technology, Inc. manufactures timing devices. During 20x1, 1,300,000 units were completed and transferred to finished-goods inventory. On December 31, 20x1, there were 310,000 units in work in process. These units were 47 percent complete as to conversion and 100 percent complete as to direct material. Finished-goods inventory consisted of 364,000 units. Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each product at the rate of 100 percent of direct-labor costs. There was no finished-goods inventory on January 1, 20x1. A review of the inventory cost records disclosed the following information:

Costs

Problem 4-25 Part 4

4-a. Complete the following schedule as of December 31, 20x1, to compute the cost of work-in-process inventory.

4-b. Complete the following schedule as of December 31, 20x1, to compute the cost of finished-goods inventory.

Costs

Units Materials Labor Work in process, January 1, 20x1 300,000 $ 306,000 $ 313,400 (82% complete as to conversion) Units started in production 1,310,000 Direct-material costs $ 2,270,000 Direct-labor costs $ 2,433,430

Explanation / Answer

Equivalent unit :

material = 1300000+(310000*100%) = 1610000

Conversion = 1300000+(310000*47%) = 1445700

Unit cost

Material = (306000+2270000) /1610000 = 1.6

Conversion = (313400+2433430+2433430)/1445700 = 3.58

4a) Cost of ending work in process = (310000*1.6+145700*3.58) = $1017606

4b) Cost of finished inventory = 1300000*5.18 = $6734000

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