makes no distinction between work done in the prior

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Unformatted text preview: method . . . – Makes no distinction between work done in the prior period and work done in the current period. • Consider total work done to date: Equivalent Units of = Production Units Completed and Transferred Out + Equivalent Units of Ending WIP – Blends together units and costs from the prior period and the current period. Wang 2013 16 Equivalent Units of Production – Weighted-Average Method % Complete Units Materials Conversion Costs Units to be accounted for WIP, June 1 Started Total 100 800 900 WIP, June 30 Wang 2013 Units Materials 70% Knowing 3/4 numbers, able to fig out last # Completed and Transferred Out 700 WIP, June 30 100% 200*100% 200 900 100% 700 200 120 900 700 Conversion Costs 200 700 200*60% Units accounted for Completed and Transferred Out Equivalent Units 820 60% 17 Departmental Production Report Reallocation - inputs will be same as outputs Analysis of physical flow of units. Calculation of equivalent units. Production Report Computation of unit costs. Wang 2013 Analysis of total costs. 18 Production Report Example • MVP Sports Equipment Company makes baseball gloves in two departments, Cutting and Stitching. • MVP uses the weighted-average cost procedure. • Material is added at the beginning of the Cutting Department, and conversion is incurred uniformly throughout the process. • Using the following information for the month of March, let’s prepare a production report for the Cutting Department. Wang 2013 19 Production Report Example Work in process, March 1: 20,000 units Materials: 100% complete. Conversion: 10% complete. Cost $ 50,000 7,200 Units started into production in March: Units completed and transferred out in March: 30,000 units 40,000 units Work in process, March 31: Materials Conversion 10,000 units 100% complete. 50% complete. Costs incurred during March Materials cost Conversion costs: Direct labor Applied manufacturing overhead Total conversion costs Total costs to account for Wang 2013 90,000 $ 86,000 107,500 193,500 $ 340,700 20 Production Report Example Analysis of Physical Flow of Units Physical Units Work in process, March 1 Units started during March Total units to account for 20,000 30,000 50,000 Units completed and transferred out during March W ork in process, March 31 Total units accounted for 40,000 10,000 50,000 Wang 2013 21 Production Report Example Calculation of Equivalent Units Physical Units Conversion Percentage Complete Work in process, March 1 Units started during March T...
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