Because most of the parts for its irrigation systems are standard, Alpha handles
ID: 2438374 • Letter: B
Question
Because most of the parts for its irrigation systems are standard, Alpha 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: 22,000 units , Total costs in beginning work in process $252,854
Costs in work in process inventory: Materials $168,020, Labor 67,564, Overhead 17,270
Units startedinto production in January 60,000
Units completed and transferred-outin January 58,000
Costs added to production: Materials $264,940, Labor 289,468, Overhead 60,578 =Total costs added into production in January $614,986
Work in process ending:
Units in process 24,000
Stage of completion for materials 100%
Stage of completion for labor and overhead 10%
Instructions for part 3
(a) Prepare a production cost report for Alpha using the weighted-average method.
Explanation / Answer
1) Materials Conversion Equivalent units of Production 82,000 60,400 Working: Materials Conversion Physical Units % of completion Equivalent Units of Production % of completion Equivalent Units of Production Units completed and transferred out 58,000 100% 58,000 100% 58,000 Units in ending Work in process 24,000 100% 24,000 10% 2,400 Total 82,000 82,000 60,400 2) Materials Conversion Cost per equivalent unit $ 5.28 $ 7.20 Working: Materials Conversion Total Work in process Inventory $ 1,68,020 $ 84,834 $ 2,52,854 Costs added during the perod $ 2,64,940 $ 3,50,046 $ 6,14,986 Total Costs $ 4,32,960 $ 4,34,880 $ 8,67,840 / Equivalent units of production 82,000 60,400 Cost per Euivalent units of produciton $ 5.28 $ 7.20 3) Materials Conversion Total Costs of Ending Work in process $ 1,26,720 $ 17,280 $ 1,44,000 Working: Equivalent units of production Unit Costs Total Costs Materials 24,000 $ 5.28 $ 1,26,720 Conversion Costs 2,400 $ 7.20 $ 17,280 Total $ 1,44,000 4) Materials Conversion Total Costs of Units transferred out $ 3,06,240 $ 4,17,600 $ 7,23,840 Working: Equivalent units of production Unit Costs Total Costs Materials 58,000 $ 5.28 $ 3,06,240 Conversion Costs 58,000 $ 7.20 $ 4,17,600 Total $ 7,23,840 5) Costs Reconcilation report Beginning Work in process Cost $ 2,52,854 Costs added during the period $ 6,14,986 Total Costs to be accounted for $ 8,67,840 Cost of Units in ending Work in process 1,44,000 Cost of Units completed and transferred out 7,23,840 Total costs acconted for 7,23,840