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
22,000
Stage of completion for materials
80%
Stage of completion for labor and overhead
30%
Costs in work in process inventory:
Materials
$168,360
Labor
67,564
Overhead
17,270
Total costs in beginning work in process
$253,194
Units started into production in January
60,000
Units completed and transferred in January
58,000
Costs added to production:
Materials
$264,940
Labor
289,468
Overhead
60,578
Total cots added into production in January
$614,986
Work in process ending
Units in process
24,000
Stage of completion for materials
50%
Stage of completion for labor and overhead
10%
Instructions:
Prepare a production cost report for Waterways using the weighted-average method and then show the journal entry for transferring the units from Molding to the Cutting Department.

Beginning22,000

Started60,000

Total units accounted for by the Department82000

Units to be assigned costs:

                        Physical Units Materials Conversion

Beginning                 22,000  17,600(80%)  6,600(30%)

Started and completed36,000  36,000          36,000

transferred                 58,00058,000      58,000

ending                        24,000   12,000(50%) 2,400(10%)

Total units                82,00070,000       60,400

(weigthed average)

Equivalent Cost:

               Direct MaterialsConversion

Total cost   $433,300.00   $434,880.00

Total equivalent units70000             60,400

Cost per equivalent unit $6.19           $7.2

Costs charged to production:  

Cost allocated to completed and partially completed units:

Explanation:

We add beginning and transferred-in to get total physical units

then, we apply the percentagge of completion and calcualte the equivalent units

which is under weigthed average method:

transferred-out units + percentage of completion in ending WIP

then, we calculate the equivalent cost per unit.

Last, we do the cost reconciliaton.

the earnings of a typical investor is around $1,000,000 to $10,000,000

hope this !

have a good day!

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