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# Tamar: Process cost summary; equivalent units; cost estimate

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Question 3:
Problem 3-5A: Process cost summary; equivalent units; cost estimates L.O. P4, P5
Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of
the manufacturing process. Direct labor and overhead are added evenly throughout the process. Tamar uses
monthly reporting periods for its weighted average process cost accounting. During May, the company
completed and transferred 22,400 units of product to finished goods inventory. Its 3,200 units of beginning
goods in process consisted of \$21,600 of direct materials, \$134,300 of direct labor, and \$99,640 of factory
overhead. It has 2,600 units (90% complete with respect to direct materials and 60% complete with respect to
direct labor and overhead) in process at month-end. After entries to record direct materials, direct labor, and
overhead for May, the company's Goods in Process Inventory account follows.
Goods in Process Inventory Acct. No.133
Date Explanation Debit Credit Balance
May 1 Balance 255,540
31 Direct materials 519,800 775,340
31 Direct labor 1,278,300 2,053,640
Requirement 1:

Prepare the company's process cost summary for May. (Omit the "\$" sign in your response. Round Cost
per EUP to 2 decimal places and rest of the values to nearest whole dollar. The total costs account for
may not be equal to the total costs to account for in the Process cost summary. The difference is due
to rounding.)

TAMAR CO.
Process Cost Summary
For the month ended May 31
Costs charged to Production
Costs of beginning goods in process \$
Costs incurred this period
Total costs to account for \$
Unit cost information
Units to account for Units accounted for
Beginning goods in process Completed & transferred out
Units started this period Ending goods in process
Total units to account for Total units accounted for
Equivalent units of production Direct Materials Direct Labor Factory Overhead
Cost per EUP Direct Materials Direct Labor Factory Overhead
Total costs \$
\$ \$
EUP
EUP EUP
EUP
Cost per EUP \$
Per EUP \$ per EUP \$
per EUP
Cost assignment and reconciliation
Costs transferred out
Direct materials \$
Direct labor
Costs of ending goods in process
Direct materials
Direct labor
Total costs accounted for \$
Requirement 2:
Prepare the journal entry dated May 31 to transfer the cost of the completed units to finished goods inventory.
Date General Journal Debit Credit
May. 31 Finished Goods Inventory
Goods in Process Inventory

#### Solution Preview

Problem 3-5A: Process cost summary; equivalent units; cost estimates L.O. P4, P5
Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of
the manufacturing process. Direct labor and overhead are added evenly throughout the process. Tamar uses
monthly reporting periods for its weighted average process cost accounting. During May, the company
completed and transferred 22,400 units of product to finished goods inventory. Its 3,200 units of beginning
goods in process consisted of \$21,600 of direct materials, \$134,300 of direct labor, and \$99,640 of factory
overhead. It has 2,600 units (90% complete with respect to direct materials and 60% complete with respect to
direct labor and overhead) in process at month-end. After entries to record direct materials, direct labor, and
overhead for May, the company's Goods in Process Inventory account follows.
Goods in Process Inventory Acct. No.133
Date Explanation Debit Credit Balance
May 1 Balance ...

#### Solution Summary

Illustrates how to calculate the process cost.

\$2.19