Massey Corporation uses a process cost system and the weighted-average cost flow
ID: 2333542 • 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
Equivalent units 1) % mat Materials % con conversion started and completed 50,000 100% 50000 100% 50000 ending work in process 25,000 100% 25000 40% 10000 units to be accounted 75,000 75000 60000 2) cost per unit Materials Con total Beginning work in process 145,000 30,000 175,000 cost added during the year 305,000 120,000 425,000 total cost 450,000 150,000 600,000 equivalent units 75000 60000 cost per unit 6 2.5 cost assigned to ending work in process materials 25000 * 6 = 150000 conversion 10000 * 2.5 = 25000 cost assigned to ending work in process 175000 3) cost assigned to units completed & transferred out materials 50000 * 6 = 300000 conversion 50000 * 2.5 = 125000 cost assigned to ending work in process 425000