Massey Corporation uses a process cost system and the weighted-average cost flow
ID: 2333409 • Letter: M
Question
Massey Corporation uses a process cost system and the weighted-average cost flow assumption. Production begins in the Fabricating Department where materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. On March 1, the beginning work in process inventory consisted of 20,000 units which were 60% complete and had a cost of $175,000, $145,000 of which were materials costs. During March, the following occurred: $305,000 $120,000 50,000 25,000 Materials added Conversion costs incurred Units completed and transferred out in March Units in ending work in process March 31 (40% complete) Instructions Answer the following questions and show the computations that support your answers. 1. What are the equivalent units of production for materials and conversion costs in the Fabricating Department for the month of March? 2. What are the costs assigned to the ending work in process inventory on March 31? 3. What are the costs assigned to units completed and transferred out during March?Explanation / Answer
Statement of Equivalent production Particulars Direct Materials %completion Equivalent mat Conversion %completion Equivalent Conv Total Opening WIP 20,000.00 100% 20,000.00 20,000.00 100% 20,000.00 Units started and completed = 50,000 - 20,000 30,000.00 100% 30,000.00 30,000.00 100% 30,000.00 ending WIP 25,000.00 100% 25,000.00 25,000.00 40% 10,000.00 Equivalent Units 75,000.00 60,000.00 Opening WIP Costs 145,000.00 30,000.00 175,000.00 Current Month Costs 305,000.00 120,000.00 425,000.00 Total costs 450,000.00 150,000.00 600,000.00 Cost per Equivalent units 6.00 2.50 Ending WIP Units 25,000.00 10,000.00 Cost of Ending WIP 150,000.00 25,000.00 175,000.00 Units completed and transferred out 50,000.00 50,000.00 Cost of Units completed and transferred out 300,000.00 125,000.00 425,000.00