Process Accounting The Welding Dept, has the following production and manufactur

Question

Process Accounting

The Welding Dept, has the following production and manufacturing cost data for February 2012. How many units were Started during the Month? What are the TOTAL equivalent units of production for Materials? What are the equivalent units of production for Materials remaining in WIP? What are the TOTAL equivalent units of production for Conversion Costs? What are the equivalent units of production for Conversion Costs remaining in WIP? How much in Material Cost was transferred out of WIP? How much in Material Cost remained in WIP? How much in Conversion Cost was transferred out of WIP? How much in Conversion Cost remained in WIP? Review the following expenses to determine if they are classified as DM (Direct Materials) CC (Conversion Cost) or OE (Other Expense) Shipping cost paid to acquire raw materials. Shipping cost paid to send finished goods to a customer. A golfcart used to transport workers and management from one end of the factory to the other end of the factory. The cleaning staff in the factory. The company president's secretery.

Explanation / Answer

1 How many units were Started during the Month?

Started during the Month = Units Transferred Out + Ending WIP Units - Beginning WIP Units

Started during the Month =74000+ 10000 - 14000

Started during the Month = 70000 Unit

2 What are the TOTAL equivalent units of production for Materials?

TOTAL equivalent units of production for Materials = 82000 unit

3 What are the equivalent units of production for Materials remaining in WIP?

the equivalent units of production for Materials remaining in WIP = 8000

4 What are the TOTAL equivalent units of production for Conversion Costs?

TOTAL equivalent units of production for Conversion Costs = 80000

5 What are the equivalent units of production for Conversion Costs remaining in WIP?

The equivalent units of production for Conversion Costs remaining in WIP = 6000

6 How much in Material Cost was transferred out of WIP?

Material Cost was transferred out of WIP = (110000+300000)/82000*14000 = $ 70000

7 How much in Material Cost remained in WIP?

Material Cost remained in WIP = (110000+300000)/82000*8000 = $40000

8 How much in Conversion Cost was transferred out of WIP?

Conversion Cost was transferred out of WIP = (30000 + 20000 + 110000 + 40000)/80000 * 14000 = $ 35000

9 How much in Conversion Cost remained in WIP?

Conversion Cost remained in WIP = (30000 + 20000 + 110000 + 40000)/80000 * 6000 = $ 15000

Calculation of Equivalent Unit (as per Weighted Method)




Unit Direct Material Conversion Cost

% of Completion Equivalent Unit % of Completion Equivalent Unit





Beginning WIP 14000 100% 14000 100% 14000





Unit Started & Completed 60000 100% 60000 100% 60000





Closing WIP 10000 80% 8000 60% 6000





Total Equivalent Unit

82000
80000

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