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

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