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# Production Cost Report - Equivalent Units

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Analysis of Work in Process Account - Weighted Average Method

Dillion Corporation manufactures an industrial cleaning compound that goes through three processing departments-Grinding, mixing, and Cooking. All raw materials are introduced at the start of work in the Grinding Department. The Work in Process T-Account for a recent month is given below.

Work in Process- Grinding Department
Inventory, March 1 (4,500 units; Conversion 60% Completed and transferred to mixing (? Units)...... ?
Complete).......................................................... 12,365
Raw material (56,800 units)............................................................. 113,475
Inventory, March 31 (2,900 units;
Conversion 70% complete).................... ?

The March 1 work in process inventory consists of \$9,125 in materials cost and \$3,240 in conversion cost. The company uses the weighted-average method.

Required.
1. Determine the equivalent units of production for March.
2. Determine the costs per equivalent unit for March
3. Determine the total cost of the units completed and transferred to the next department during March and the total cost of ending work in process inventory.
4. What criticism can be made of the unit costs that you have computed if they are used to evaluate how well costs have been control?

#### Solution Preview

We can answer the questions by making a quantity schedule and a cost schedule.
The quantity schedule reconciles the physical units and the cost schedule reconciles the costs

DILLON CORPORATION
Quantity Schedule and Equivalent Units

Quantity
Schedule
Pounds to be accounted for:
Work in process, March 1 4,500 This is given
Started into production 56,800 This is given
Total pounds 61,300 This is the total units to account for

Equivalent Units
Labor &
Pounds accounted for as follows:
Transferred to mixing 58,400 58,400 58,400 The total ...

#### Solution Summary

The solution explains how to prepare a production cost report and use it to calculate the equivalent units and cost

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Similar Posting

## Completing the four steps necessary to prepare a production cost report. Calculate equivalent units of production using the weighted-average method. Compare the weighted average method of calculating equivalent units of production to the FIFO method.

I need help in how to approach the following question:

Bicnell Corporation manufactures water skis through two processes. Molding and Packaging. In the Molding Department fiberglass is heated and shaped into the form of a ski. In the Packaging Department, the skis are placed in cartons and sent to the finishing goods warehouse. Materials are entered at the beginning of both processes. Labor and manufacturing overhead are incurred uniformly throughout each process. Production and cost data for the Molding Department for January 2008 are presented below.

Production Data January
Beginning work in process units -0-
Units started into production 35,000
Ending work in process units 5,000
Percent completed-ending inventory 40%

Cost Data
Materials 595,000
Labor 96,000