Because most of the parts for its irrigation systems are standard, Waterways han
ID: 2412438 • Letter: B
Question
Because most of the parts for its irrigation systems are standard, Waterways handles the majority of its manufacturing as a process cost system. There are multiple process departments. Three of these departments are the Molding, Cutting, and Welding departments. All items eventually end up in the Package department which prepares items for sale in kits or individually.
The following information is available for the Molding department for January:
Work in process beginning:
Units in process
24,000
Stage of completion for materials
80%
Stage of completion for labor and overhead
30%
Costs in work in process inventory:
Materials
$172,460
Labor
68,900
Overhead
141,300
Total costs in beginning work in process
$382,660
Units started into production in January
71,000
Units completed and transferred in January
74,000
Costs added to production:
Materials
$378,605
Labor
690,080
Overhead
1,383,160
Total cots added into production in January
$2,451,845
Work in process ending
Units in process
21,000
Stage of completion for materials
75%
Stage of completion for labor and overhead
20%
Instructions:
Prepare a production cost report for Waterways using the weighted-average method.
Work in process beginning:
Units in process
24,000
Stage of completion for materials
80%
Stage of completion for labor and overhead
30%
Costs in work in process inventory:
Materials
$172,460
Labor
68,900
Overhead
141,300
Total costs in beginning work in process
$382,660
Units started into production in January
71,000
Units completed and transferred in January
74,000
Costs added to production:
Materials
$378,605
Labor
690,080
Overhead
1,383,160
Total cots added into production in January
$2,451,845
Work in process ending
Units in process
21,000
Stage of completion for materials
75%
Stage of completion for labor and overhead
20%
Explanation / Answer
Solution:
Computation of Equivalent unit of Production - Weighted Average (Molding Department) Particulars Physical Units Material Conversion (Labor + Overhead) Unit completed & Transferred out (24000 + 71000 - 21000) 74000 74000 74000 Closing WIP: 21000 Material (75%) 15750 Conversion (20%) 4200 Equivalent units of production 95000 89750 78200