Hanson
Company manufactures handheld calculators and has the following information
available for the month of July.
|
Work in process, July
1
|
67,000
|
units
|
|
(100% complete for
materials, 24% for conversion)
|
|||
Direct
materials
|
$
|
110,000
|
|
Conversion
|
$
|
195,000
|
|
Number of units
started
|
93,000
|
units
|
|
July costs
|
|||
Direct
materials
|
$
|
204,000
|
|
Conversion
|
$
|
249,000
|
|
Work in process, July
31
|
63,000
|
units
|
|
(100% complete for
materials, 15% for conversion)
|
|||
Required:
|
Using the weighted average method
of process costing, complete each of the following steps:
|
(a)
|
Reconcile the number of physical
units worked on during the period.
|
Physical
Units
|
Physical
Units
|
|||||
Beginning Units
|
67,000
 |
Units Completed
|
97,000
|
|||
Units Started
|
93,000
|
Ending Units
|
63,000
|
|||
Total Units
|
160,000
|
Total Units
|
160,000
|
|||
(b)
|
Calculate the number of equivalent
units.
|
Equivalent
Units
|
||||
Direct
Materials
|
Conversion
|
|||
Units Completed
|
97,000
|
97,000
|
||
Ending Inventory
|
63,000
|
9,450
|
||
Total
|
160,000
|
106,450
|
||
(c)
|
Calculate
cost per equivalent unit. (Round your answers to 5
decimal places. Omit the "$" sign in your response. )
|
Direct
Materials
|
Conversion
|
|||||
Cost per Equivalent
Unit
|
$
|
1.96250
|
$
|
4.17097
|
||
(d)
|
Reconcile
the total cost of work in process. (Use rounded
cost per Equivalent unit. Round your answers to the nearest dollar amount.
Omit the "$" sign in your response. )
|
Direct
Materials
|
Conversion
|
Total
Cost
|
|||||||
Units Completed
|
$
|
190,362
|
$
|
404,584
|
$
|
594,947
|
|||
Ending Inventory
|
123,638
|
39,416
|
163,053
|
||||||
Total Cost Accounted
for
|
314,000
|
444,000
|
758,000
|
||||||
Explanation:
(a)
Units Completed (Physical) 160,000
– 63,000 = 97,000
|
(b)
Ending inventory (Conversion)
63,000 x 15% = 9,450
|
(c)
Direct
Materials
|
Conversion
|
|||||
Beginning Inventory
Costs
|
$
|
110,000
|
$
|
195,000
|
||
Current Period Cost
|
204,000
|
249,000
|
||||
Total Cost
|
$
|
314,000
|
$
|
444,000
|
||
Equivalent Units
|
160,000
|
106,450
|
||||
Cost per Equivalent
Unit
|
$
|
1.96250
|
$
|
4.17097
|
||
(d)
Units Completed (Direct Materials)
97,000 x 1.96250 = $190,363
|
Units Completed (Conversion)
97,000 x 4.17097 = $404,584
|
Ending Inventory (Direct
Materials) 63,000 x 1.96250 = $123,638
|
Ending Inventory (Conversion)
9,450 x 4.17097 = $39,416
|
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