Tomlinson Corporation is a biotech company based in Milpitas. It makes a cancer-
ID: 2469511 • Letter: T
Question
Tomlinson Corporation is a biotech company based in Milpitas. It makes a cancer-treatment drug in a single processing department. Direct materials are added at the start of the process. Conversion costs are added evenly during the process. Tomlinson uses the weighted-average method of process costing. The following information for July 2014 is available.
Equivalent Units
Physical Units Direct materials Conversion costs
Work in proces jul 1 8,700 8700 2,175
Started during july 34,500
completed & transfered 32000 32000 32000
Work in process 11200 11200 7840
aDegree of completion: direct materials, 100%; conversion costs, 25%.
bDegree of completion: direct materials, 100%; conversion costs, 70%.
Total cost for july
Work in process, beginning
Direct materials $61500
conversion cost $43200 =104700
direct materials added during jul 301,380
conversion costs added durin july 498624
total costs to account for = 904,704
Required: 1. Calculate the cost per equivalent unit for direct materials and conversion costs.
2. Summarize the total costs to account for, and assign them to units completed (and transferred out) and to units in ending work in process.
please show calculations
Explanation / Answer
Units Equivalent Units Material Conversion Cost WIP in the begining 8700 8700 2175 Started During July 34500 Units to Account for 43200 Units Completed and Transferred 32000 32000 32000 WIP in the end 11200 11200 7840 Units accounted For 43200 43200 39840 Calculation of Cost per Equivalent Unit Material Conversion Cost Total WIP in the Beginning 61,500 43,200 104,700 Cost Incurrecd during July 301,380 498,624 800,004 Total (A) 362,880 541,824 904,704 Units Units Completed Equivalent Units 32000 32000 Ending WIP 11200 7840 Total (B) 43200 39840 Cost per Equivalent Units (C = A / B) 8.40 13.60 Cost Reconcilation Particulars Amount Total Cost to Account For 904,704 Cost of Completed units Material ($8.40 X 32000 Units) 268,800 Labour ($13.60 * 32000 Units) 435,200 Total Cost of Completed Goods 704,000 Cost of ending WIP Material ($8.40 X 11200 Units) 94,080 Labour ($13.60 X 7840 Units) 106,624 Total Cost of Ending WIP 200,704 Total Cost Accounted For 904,704