Exercise 16-16 Weighted average: Process cost summary LO C3 Elliott Company prod

Question

Exercise 16-16 Weighted average: Process cost summary LO C3

Elliott Company produces large quantities of a standardized product. The following information is available for its production activities for March.

Prepare a process cost summary report for this company, showing costs charged to production, unit cost information, equivalent units of production, cost per EUP, and its cost assignment and reconciliation. Use the weighted-average method. (Round "Cost per EUP" to 2 decimal places.)

Units Costs Beginning work in process inventory 1,000 Beginning work in process inventory Started 10,000 Direct materials $ 2,000 Ending work in process inventory 2,000 Conversion 3,240 $ 5,240 Status of ending work in process inventory Direct materials added 81,820 Materials—Percent complete 100 % Direct labor added 74,110 Conversion—Percent complete 40 % Overhead applied (140% of direct labor) 103,754 Total costs to account for $ 264,924 Ending work in process inventory $ 30,024

Explanation / Answer

1) Total costs to account for: Beginning work in process $       5,240 Costs incurred during the year $ 2,59,684 Total costs to account for $ 2,64,924 Difference due to rounding cost/unit 0 2) Unit Reconcilation: Units to account for: Beginning Unit in process           1,000 Units started during the current period         10,000 Total units to account for         11,000 Total units accounted for: Units completed           9,000 Units in Ending work in process           2,000 Total Units accounted for         11,000 3) Equivalent units of Production(EUP)-Weighted Average Method Units % Materials EUP-Materials % Conversion EUP-Conversion Units completed           9,000 100%                   9,000 100%                       9,000 Units in Ending Work in process           2,000 100%                   2,000 40%                           800 Total units         11,000                 11,000                       9,800 4) Costs per equivalent units of production: Materials Conversion Costs of Beginning work in process $            2,000 $                   3,240 Costs incurred during the year $          81,820 $             1,77,864 Total Costs $          83,820 $             1,81,104 / Equivalent units of production              11,000                       9,800 Cost per equivalent unit of production (rounded to 2 decimals) $               7.62 $                   18.48 5) Total Costs Accounted for: Cost of units transferred out: EUP Cost per EUP Total Cost Direct Materials           9,000 $               7.62 $            68,580 Conversion           9,000 $            18.48 $         1,66,320 $        2,34,900 Total costs transferred out Costs of ending work in process Direct Materials           2,000 $               7.62 $            15,240 Conversion               800 $            18.48 $            14,784 $           30,024 Total cost of ending work in proess Total costs accounted for $        2,64,924

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