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    Managerial Accounting: Straightforward Weighted-Average Process Costing

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    Problem 4-26
    Straightforward Weighted-Average Process Costing, Step-by-Step Approach

    Piscataway Plastics Company manufactures a highly specialized plastic that is used extensively in the automobile industry. The following data have been compiled for the month of June. Conversion activity occurs uniformly throughout the production process.

    Work in process, June 1—50,000 units: 50,000
    Direct material: 100% complete cost of 120,00
    Conversion: 40% complete, cost of 34,400
    Balance in work in process, June 1 154400

    Units started during June 200,000
    Units completed during June and transferred out to finished-goods inventory 190000
    Work in process, June 30:
    Direct material: 100% complete
    Conversion: 60% complete

    Costs incurred during June:
    Direct material 492500

    Conversion costs:
    Direct labor 87450
    Applied manufacturing overhead 262350
    Total conversion costs 349800

    Required: Prepare schedules to accomplish each of the following process-costing steps for the month
    1. Analysis of physical flow of units.
    2. Calculation of equivalent units.
    3. Computation of unit costs.
    4. Analysis of total costs.

    Problem 4-27
    Missing Data; Production Report; Weighted-Average
    The following data pertain to the Vesuvius Tile Company for July. See the attached file for proper formatting.

    Work in process, July 1 (in units) 20000
    Units started during July 45000 45000
    Total units to account for 65000
    Units completed and transferred out during July ? 50000
    Work in process, July 31 (in units) 15000
    Total equivalent units: direct material 65000
    Total equivalent units: conversion ? 56000
    Work in process, July 1: direct material 164400
    Work in process, July 1: conversion ? 79800
    Costs incurred during July: direct material ? 371850
    Costs incurred during July: conversion 65940
    Work in process, July 1: total cost 244200
    Total costs incurred during July 1031250
    Total costs to account for 1275450
    Cost per equivalent unit: direct material 8.25
    Cost per equivalent unit: conversion ? 13.2
    Total cost per equivalent unit 21.45
    Cost of goods completed and transfered out during July 1072500 1072500
    Cost remaining in ending work-in-process inventory: direct material 123750 123750
    Cost remaining in ending work-in-process inventory: conversion 79200
    Total cost of July 31 work in process 202950
    Additional Information:
    a. Direct material is added at the beginning of the production process, and conversion activity occurs uniformly throughout the process.
    b. The company uses weighted-average process costing.
    c. The July 1 work in process was 30 percent complete as to conversion.
    d. The July 31 work in process was 40 percent complete as to conversion.

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    Solution Summary

    The Solution provides two examples of weighted-average process costing.