Process Costing Weighted Average 4 A 1 Process Costing -Weighted Average DATA IN

Question

Process Costing Weighted Average

4 A 1 Process Costing -Weighted Average DATA INPUT 3 Casablanca Ltd. produces a single lacquer paint which passes through two production 4 departments. The following information concerns the first of those production departments 5 Direct materials are added at the beginning of the production process and conversion costs are 6 incurred uniformly throughout the process. Total conversion costs are computed as direct labour 7 costs, plus 8 The following information is available for May 30% of direct labour costs, for the allocation of overhead costs Opening Work in Process: 10 Number of units 11 Degree of completion 12 Material costs 13 Conversion costs 14 May Production 15 Units started 6 Units completed and transferred to Process 2 17 Current material costs 18Current direct labour costs 19 20 Closing Work In Process: 21 Degree of completion 5,600 40% $27,000 $57,600 45,600 32,800 $118,700 $187,000 30% 23 The company uses weighted average costing. There is no spoilage or wastage in the production. 24 process 25 Required: 26 a) Prepare a Production Cost Report for May, showing the allocation of costs to 27 28 b) Prepare the Work in process T account for the first production department for May 29 30 closing work in process and to production transferred to the next department Solve using a spreadsheet showing calculations to two decimal places

Explanation / Answer

Solution a:

Solution b:

Computation of Equivalent unit of Production - Weighted Average (First Department) Particulars Physical Units Material Conversion (Labor + Overhead) Unit completed & Transferred out 32800 32800 32800 Closing WIP: (5600 + 45600 - 32800) 18400 Material (100%) 18400 Conversion (30%) 5520 Equivalent units of production 51200 51200 38320

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