Piscataway Plastics Company manufactures a highly specialized plastic that is us
ID: 2333651 • Letter: P
Question
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:
Direct material: 100% complete, cost of $ 168,000
Conversion: 40% complete, cost of 88,600
Balance in work in process, June 1 $ 256,600
Units started during June 190,000
Units completed during June and transferred out to finished-goods inventory 210,000
Work in process, June 30:
Direct material: 100% complete Conversion:
60% complete Costs incurred during June:
Direct material $ 480,000 Conversion costs:
Direct labor $ 80,450
Applied manufacturing overhead 241,350
Total conversion costs $ 321,800
Prepare schedules to accomplish each of the following process-costing steps for the month of June.
Use the weighted-average method of process costing.
1. Analysis of physical flow of units.
2. Calculation of equivalent units.
3. Computation of unit costs.
4. Analysis of total costs.
Explanation / Answer
Solution:
From the given data we need to find the requirements 1, 2, 3, and 4
Answer 1. Analysis of physical flow of units:
Total units in either finished goods and closing work in process =
(Total units in opening WIP + units introduced during into process during the month)
= 50,000 + 1,90,000
Total units in either finished goods and closing work in process = 2,40,000 ---------(1)
Completed and transferred out from the process = 2,10,000 -------------(2)
Units in closing work in process = (1) - (2)
= 2,40,000 - 2,10,000
Units in closing work in process = 30,000
Answer 2. Calculation of equivalent units:
Answer 3: Computation of unit costs:
Computation of unit costs = Direct material cost + Conversion costs
Direct material cost = Cost of direct material in opening WIP + Incurred during the month
= $1,68,000 + $4,80,000
Direct material cost = $6,48,000
Direct material cost per unit = $6,48,000 / 2,40,000 = $2.7
Conversion costs = Direct labour + manufacturing overhead
= 80,450 + 2,41,350
Conversion costs =3,21,800
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Particulars Trasferred during the month to finished goods Closing work in process Total units Direct material 2,10,000 30,000 % of completion 100% 100% Equivalent units 2,10,000 30,000 2,40,000 Conversion units 2,10,000 30,000 % of completion 100% 60% Equivalent units 2,10,000 18,000 2,28,000