(a) Econo Corporation uses the weighted average method in its process costing sy

Question

(a) Econo Corporation uses the weighted average method in its process costing system. The company has the following information available for the month of June. Work in process, 1st June 400 units Direct material: 65% complete Conversion costs: 45% complete $5 700 6 800 A total of 6500 units were started and 5900 units were transferred out. Costs incurred during June: Direct material: Conversion costs: $125 500 207 000 Work in process, 30th June Direct material: 50% complete Conversion costs: 35% complete

Explanation / Answer

Req 1: Opening wip 400 Add: Units started 6500 Less: Units Completed 5900 Clolsing WIP 1000 Physical units of Closing WIP 1000 units Req 2: Equivalent Units statement Material Conversion Units Input Particulars Units Output Equivalent units % complete Equivalent units % complete 400 Opening WIP 6500 Input Finished Goods 5900 5900 100% 5900 100% Closing WIP 1000 500 50% 350 35% 6900 6900 6400 6250 Req 3:Statement Showing cost per unit Cost of Opening WIP Current Cost Total Equivalent units Cost per unit Material 5700 125500 131200 6400 20.5 Conversion 6800 20700 27500 6250 4.4 Cost per unit $24.90 per unit Req 4& 5Cost of production summary Total cost of Completed Goods 146,910 (5900 units@24.90 per unit) Cost of Closing WIP 11790 Material (500*20.50) 10250 Conversion(350*4.40) 1540

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