Saddleback Company makes camping lanterns using a single production process. All direct materials are added at the beginning of the manufacturing process. Information for the month of March follows: Units Costs
Beginning work in process (30% complete) 118,300
Direct materials $193,000
Conversion cost 345,000
Total cost of beginning work in process $538,000
Number of units started 244,000
Number of units completed and transferred to finished goods 334,900
Ending work in process (65% complete)
Direct materials $249,700
Conversion cost 332 000
Total current period costs $581,700

Required:

Using the weighted-average method of process costing, complete each of the following steps:

a. Reconcile the number of physical units worked on during the period.
b. Calculate the number of equivalent units.
c. Calculate the cost per equivalent unit.
d. Reconcile the Total cost of work in process.

Part a

Reconciliation of the number of Physical units worked

INPUTS :

Beginning Inventory units            118,300

Add Started during the period   244,000

Total                                             362,300

OUTPUTS :

Completed and Transferred       334,900

Ending Work In Process               24,400

Total                                             362,300

Part b

Materials =  359,300 units

Conversion Costs =  350,760 units

Part c

Materials =  $1.23

Conversion Costs =  $1.93

Part d

Reconcile the Total cost of work in process.

Cost in Beginning Inventory                     $538,000  

Add Costs During the Period                     $581,700

Total                                                           $1,119,700

Cost of Units Still in Process                       $60,622

Units Completed and Transferred         $1,058,284

Total                                                          $1,118,506

Explanation:

Step 1 : Equivalent units

These are physical units outputs (completed and transferred and units in process) expressed in terms of percentage of work completed in terms of materials and conversion costs

Materials = 334,900 + 24,400 x 100% = 359,300

Conversion Costs = 334,900 + 24,400 x 65% = 350,760

Step 2 : Cost per Equivalent unit

Cost per Equivalent unit = Total Cost ÷ Total Equivalent Units

therefore,

Materials = ($193,000 + $249,700) ÷ 359,300 = $1.23

Conversion Costs = ($345,000 + $332 000) ÷ 350,760 = $1.93

Total Unit Cost = $1.23 + $1.93 = $3.16

Step 3 : Cost of Units Still in Process and Units Completed and Transferred

Cost of Units Still in Process = 24,400 x $1.23 + 15,860 x $1.93 = $60,622

Units Completed and Transferred = 334,900 x $3.16 = $1,058,284

explanation:

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