Piscataway Plastics Company manufactures a highly specialized plastic that is us
ID: 2338000 • 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 1-40,000 units: Direct material: 100% complete, cost of conversion : 40% complete, cost of $209,500 154,600 $364,100 230,000 Balance in work in process, June 1 Units started during June Units completed during June and transferred out to finished-goods inventory Work in process, June 30: 190,000 Direct material: 100% complete Conversion : 60% compiete Costs incurred during June: $492,500 Direct material Conversion costs: Direct labor Applied manufacturing overhead Total conversion costs 86,300 258,900 $345,200 Required 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 costsExplanation / Answer
1) The physical flow of units should reflect the following inventory physical unit in ending WIP = Physical units in beginning WIP+Physical unit started-physical unit compeleted and transferred Analysis of physical flow of unit Particulars Physical units WIP June 1 40000 Units started during june 230000 Total units to account for 270000 unit completed & transferred out during june 190000 Work in Process June 30 80000 Total units accounted for 270000 2) Calculation of Equivalent units Particulars Physical unit % Of completion Equivalent units Direct material Conversion cost Direct material Conversion cost Work in Process june 1 40000 100% 40% units started during june 230000 total unit to accounted 270000 unit completed and transferred 190000 100% 100% 190000 190000 work in process june 30 80000 100% 60% 80000 48000 total unit accounted 270000 270000 238000 total Equivalent unit 3) Computation Of Total Unit Cost Particulars Direct Material (1) Conversion cost (2) Total (1)+(2) Work in process june 1 209500 154600 364100 Cost incurred during june 492500 345200 837700 Total cost (a) 702000 499800 1201800 Equivalent units (b) 270000 238000 Cost per equivalent unit (a)/(b) 2.6 2.1 4.7 ANALYSES OF TOTAL COST 4) Cost of goods completed and transferred (no of units transferred )* (total cost per equivalent unit) 190000*4.7 = $ 893000 5) Cost remaining in june 30 WIP Direct material = ( no of equialent unit of direct material ) *( cost per equivalent unit of direct material) = 80000*2.60 = $208000 Conversion cost = ( no of equivalent unit of conversion )*(cost per equivalent unit of conversion) Conversion cost = 48000*2.10 = 100800 Total cost of june 30 WIP = 208000+100800= 308800