Glen Manufacturing Company uses a process costing system to account for the production of cleaning
Production:
10,000 units (50% complete as to conversion costs) beginning work in process (WIP)
38,000 units finished and transferred out
Ending WIP comprises 4,500 units that are 40% complete as to conversion costs
Manufacturing costs:
1/7/15 Opening WIP Materials $4,000
1/7/15 Opening WIP Manufacturing overhead & Direct Labour $6,000
Materials $54,000
Direct labour $45,000
Manufacturing overhead $56,000
Required:
Calculate the cost per finished goods and the cost per closing WIP for the Mixing Department for the m
SOLUTION
GLEN MANAUFACTURING COMPANY
PRODUCT REPORT
JULY
WEIGHTED AVERAGE METHOD
STEP 1: CALCULATION FOR PHYSICAL AND EQUIVALENT UNITS
Description
No. of Units
%age Completed
D.M
Opening
Finished
Ending Wip
No. of Equivalent Units
10000
38000
4500
100%
100%
100%
STEP 2: CALCULATION FOR PER UNIT EQUIVALENT COST OF PRODUCTION
DESCRIPTION
Total D.M Cost Incurred During July (4000+54000)
Total Conversion Cost Incurred during July (6000+45000+56000)
EQUIVALENT UNITS
PER UNIT EQUIVALENT COST
STEP 3: ASSIGNING THE EQUIVALENT UNITS COST TO ENDING AND COMPLETED UNITS
DESCRIPTION
Ending Units (D.M 4500x1.36) (CONVERSION 1800x2.69)
Completed and Transferred Out Units (D.M 38000x1.36) (CONVERSION 38000x2.69)
Outcome: (Weighted Average Method)
Cost of Ending Units
Cost of Completed and Transferred Out Units
$10,962
$153,900
to account for the production of cleaning liquids and all materials are added at the beginning of operations in the M
beginning work in process (WIP)
mplete as to conversion costs
ct Labour $6,000
WIP for the Mixing Department for the month of July using Weighted Average Method.
%age Completed
Conversion
50%
100%
40%
+54000)
+45000+56000)
EQUILANT UNITS
D.M
Conversion
38000
4500
42500
38000
1800
39800
D.M
58000
Conversion
107000
42500
1.36
39800
2.69
D.M
Conversion
N 1800x2.69)
6120
4842
ONVERSION 38000x2.69)
51680
57800
COMPLETED UNITS
102220
107062
10962
153900
ning of operations in the Mixing Department. The following production and manufacturing cost data for the Depar
ost data for the Department are available for July.
Glen Manufacturing Company uses a process costing system to account for the production of cleaning
Production:
10,000 units (50% complete as to conversion costs) beginning work in process (WIP)
38,000 units finished and transferred out
Ending WIP comprises 4,500 units that are 40% complete as to conversion costs
Manufacturing costs:
1/7/15 Opening WIP Materials $4,000
1/7/15 Opening WIP Manufacturing overhead & Direct Labour $6,000
Materials $54,000
Direct labour $45,000
Manufacturing overhead $56,000
Required:
Calculate the cost per finished goods and the cost per closing WIP for the Mixing Department for the m
SOLUTION
GLEN MANAUFACTURING COMPANY
PRODUCT REPORT
JULY
FIRST IN FIRST OUT METHOD
STEP 1: CALCULATION FOR PHYSICAL AND EQUIVALENT UNITS
Description
No. of Units
Opening
Finished
Ending Wip
No. of Equivalent Units
10000
38000
4500
%age Completed
D.M
100%
100%
100%
STEP 2: CALCULATION FOR PER UNIT EQUIVALENT COST OF PRODUCTION
DESCRIPTION
Total D.M Cost Incurred During July (54000)
Total Conversion Cost Incurred during July (45000+56000)
EQUIVALENT UNITS
PER UNIT EQUIVALENT COST
STEP 3: ASSIGNING THE EQUIVALENT UNITS COST TO ENDING AND COMPLETED UNITS
DESCRIPTION
Cost of Units Started Last month Completed Last month
Cost of Units Started Last month Completed This month
Cost of Units Started This month Completed This month
Cost of Units Started this Month but remained Unfinished (Ending)
Outcome: (Weighted Average Method)
Cost of Ending Units
Cost of Completed and Transferred Out Units
$9,765
$133,760
ount for the production of cleaning liquids and all materials are added at the beginning of operations in the Mixing
ning work in process (WIP)
as to conversion costs
our $6,000
or the Mixing Department for the month of July using Weighted Average Method.
%age Completed
Conversion
50%
100%
40%
EQUILANT UNITS
D.M
Conversion
0
38000
4500
42500
5000
38000
1800
44800
D.M
54000
Conversion
00)
101000
42500
1.27
44800
2.25
D.M
Conversion
th
4000
6000
th
11250
LETED UNITS
10000
11250
th
Ending)
48260
85500
5715
4050
133760
9765
of operations in the Mixing Department. The following production and manufacturing cost data for the Departmen
data for the Department are available for July.
