Seemore
Company makes camping lanterns using a single production process. All
direct materials are added at the beginning of the manufacturing
process. Information for the month of March follows:
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| Beginning work in process (28% complete) | 60,900 units |
| Direct materials | $ | 103,000 |
| Conversion cost | | 162,000 |
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| Total cost of beginning work in process | $ | 265,000 |
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| Number of units started | | 123,500 |
| Number of units completed and transferred to finished goods | | 162,400 |
| Ending work in process (70% complete) | | |
| Direct materials cost incurred | $ | 258,700 |
| Conversion cost applied | | 328,000 |
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| Total cost added | $ | 586,700 |
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| 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 | 60,900  | | | Units completed | 162,400 | |
| Units started | 123,500 | | | Ending units | 22,000 | |
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| Total units | 184,400 | | | Total units | 184,400 | |
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| (b) | Calculate the number of equivalent units. |
| Equivalent Units |
| Direct Materials | Conversion |
| Units completed | 162,400 | | 162,400 | |
| Ending inventory | 22,000 | | 15,400 | |
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| Total | 184,400 | | 177,800 | |
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| (c) |
Calculate the cost per equivalent unit. (Round your answers to 5 decimal places. Omit the "$" sign in your response.)
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| Direct Materials | Conversion |
| Cost per equivalent unit | $ | 1.96150 | | $ | 2.75591 | |
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| (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.)
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| Direct Materials | Conversion | Total Cost |
| Units completed | $ | 318,548 | | $ | 447,560 | | $ | 766,107 | |
| Ending inventory | | 43,153 | | | 42,441 | | | 85,594 | |
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| Total cost accounted for | $ | 361,701 | | $ | 490,001 | | $ | 851,701 | |
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Explanation:
(a)
| Ending units (Physical) 184,400 – 162,400 = 22,000 |
(b)
| Ending inventory (Conversion) 22,000 x 70% = 15,400 |
(c)
| Direct Materials | Conversion |
| Beginning inventory costs | $ | 103,000 | | $ | 162,000 | |
| Current period cost | | 258,700 | | | 328,000 | |
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| Total cost | $ | 361,700 | | $ | 490,000 | |
| Equivalent units | ÷ | 184,400 | | ÷ | 177,800 | |
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| Cost per equivalent unit | $ | 1.96150 | | $ | 2.75591 | |
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(d)
| Units completed (Direct Materials) 162,400 x $1.96150 = $318,547 |
| Units completed (Conversion) 162,400 x $2.75591 = $447,559 |
| Ending inventory (Direct Materials) 22,000 x $1.96150 = $43,153 |
| Ending inventory (Conversion) 15,400 x $2.75591 = $42,441 |
