3. (9 points) Anchor Inc. uses the weighted-average method in its process costin
ID: 2340196 • Letter: 3
Question
3. (9 points) Anchor Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month. Work in process, beginning: 5,000 Units in process Costs in the beginning inventory: S67,000 Materials cost Conversion cost... $50,750 Units started into production during the month.130,000 Units completed and transferred out 120,000 Costs added to production during the month: Materials cost... $500,000 .$226,000 Work in process, ending: Units in process %ofcompletion with respect to materials % ofcom pletion with respect to conversion 15,000 40% 20% Required: Prepare a process costing departmental production report (calculation of equivalent units, cost per equivalent unit, and cost reconciliation) for the department using the weighted-average method. Round the cost per unit to t nearest cent.Explanation / Answer
Units
Reconciliation of Units
A
Opening WIP
5,000
B
Introduced
130,000
C=A+B
TOTAL
135,000
D
Transferred
120,000
E=C-D
Closing WIP
15,000
Statement of Equivalent Units
Material
Conversion Cost
Units
Complete %
Equivalent units
Complete %
Equivalent units
Transferred
120,000
100%
120,000
100%
120,000
Closing WIP
15,000
40%
6,000
20%
3,000
Total
135,000
Total
126,000
Total
123,000
Cost per Equivalent Units
COST
Material
Conversion Cost
TOTAL
Beginning WIP Inventory Cost
$ 67,000.00
$ 50,750.00
$ 117,750.00
Cost incurred during period
$ 500,000.00
$ 226,000.00
$ 726,000.00
Total Cost to be accounted for
$ 567,000.00
$ 276,750.00
$ 843,750.00
Total Equivalent Units
126,000
123,000
Cost per Equivalent Units
$ 4.50
$ 2.25
Statement of cost
Cost
Equivalent Cost/unit
Ending WIP
Transferred
Units
Cost Allocated
Units
Cost Allocated
Material
$ 4.50
6,000
$ 27,000.00
120,000
$ 540,000.00
Conversion Cost
$ 2.25
3,000
$ 6,750.00
120,000
$ 270,000.00
TOTAL
TOTAL
$ 33,750.00
TOTAL
$ 810,000.00
Reconciliation
Cost to be accounted for
Beginning Work In Progress:
Material
$ 67,000.00
Conversion Cost
$ 50,750.00
$ 117,750.00
Cost incurred during period:
Material
$ 500,000.00
Conversion Cost
$ 226,000.00
$ 726,000.00
Total Cost to be accounted for
$ 843,750.00
Cost accounted for
Cost of Units transferred
Equivalent Units
Cost per Equivalent Units
Cost accounted for
Material
120,000
$ 4.50
$ 540,000.00
Conversion Cost
120,000
$ 2.25
$ 270,000.00
$ 810,000.00
Cost of ending WIP
Equivalent Units
Cost per Equivalent Units
Cost accounted for
Material
6,000
$ 4.50
$ 27,000.00
Conversion Cost
3,000
$ 2.25
$ 6,750.00
$ 33,750.00
Total Cost accounted for
$ 843,750.00
Units
Reconciliation of Units
A
Opening WIP
5,000
B
Introduced
130,000
C=A+B
TOTAL
135,000
D
Transferred
120,000
E=C-D
Closing WIP
15,000
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