Part 2 - Process Costing The candy making department at WONKA provides you with

Question

Part 2 - Process Costing The candy making department at WONKA provides you with the following information for August. All direct materials are placed in process at the beginning of production The facts are Beginning WIP Purchases Incurred Allocated Completed Ending WIP Aug. 1 WIP 5,000 units (50% complete) Aug, 31DM 312,000 units Aug, 31DL Aug, 31 FO Aug, 31305,000 units Aug. 31 Unfinished units are 20% complete $40,000 $1,000,000 $200,000 $100,000 REQUIRED: Use the weighted average process cost method to identify and classify the costs below: the Determine the equivalent units of productions fo costs t materials cost per equivalent unit 4. Determine conversion cost per equivalent unit. Cost of units started and completed during Augu

Explanation / Answer

Calculation of Equivalent Unit Direct Material Conversion Unit Completed & Transferred 305000 305000 Unit in Ending WIP Material (12000 Unit*100%) 12000 Conversion Cost (12000Unit*20%) 2400 Total Equivalent Unit 317000 307400 Cost Per EquivalentUnit Direct Material Conversion Direct Material Cost $1,000,000.00 Direct Labour cost $200,000.00 Fixed Overhead $100,000.00 Total Cost $1,000,000.00 $300,000.00 No. of Equivalent unit $317,000.00 $307,400.00 Cost /equivalent Unit $3.15 $0.98 Hence Conversion cost will be $0.98/ Unit Computation of Unit in WIP Unit in Beginning WIP 5000 Unit Started during the Period 312000 Less: Unit Completed & transferred 305000 Unit in Ending WIP 12000

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