659unit conversion costs total 370000 360000 1028unit

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Unformatted text preview: nit * Rounded • Cost Reconciliation Beginning WIP Units completed from beginning WIP $ 60,000 60,000 * $1.028 = 61,680 270,000 * $1.687 = 455,490 Materials 50,000 * $0.659 = 32,950 Conversion costs 30,000 * $1.028 = 30,840 Units started and completed Ending WIP Total Wang 2013 $ 640,960 33 Process Costing: 5-Step Procedure • #1: Compute physical flow • #2: Calculate equivalent units in “units” – For direct materials and conversion costs • #3: Summarize total costs • #4: Calculate costs per equivalent unit (#4 = #3 ÷ #2) in “$” • #5: Accountability/Cost Reconciliation (#5 = #2 * #4) – Determine the cost to be removed from WIP and transferred either to the next production department or to finished goods Wang 2013 34 Example: Weighted Average vs. FIFO Smith Company reported the following activity in the Assembly Department for the month of June: 6,000 units 5,400 units Costs added to production in June Materials cost $ 118,621 Conversion cost $ 81,130 Ending Work in Process Inventory: Materials: 60% complete Conversion: 30% complete Wang 2013 900 units 35 Assumpti changes assume materials are added into beg. Production started during June Production completed during June 300 units 6,119 3,920 inventory Beginning Work in Process Inventory: Materials: 40% complete $ Conversion: 20% complete $ Example: Weighted Average vs. FIFO • Weighted Average Method Percent Completed Units Work in process, June 1 300 Units started into production in June 40% 20% 60% 30% 6,000 Units completed and transferred out of Department A during June Materials Conversion 5,400 Work in process, June 30 Wang 2013 900 36 Example: Weighted Average vs. FIFO • Weighted Average Method – Equivalent Units: Materials Units completed and transferred out of the Department in June 5,400 Conversion 5,400 W ork in process, June 30: 900 units × 60% 540 900 units × 30% Equivalent units of Production in the Department during June Wang 2013 270 5,940 5,670 37 Example: Weighted Average vs. FIFO • Weighted Average Method – Summary of total costs: Total Cost Cost to be...
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