Question

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 Packaging 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 23,000 Stage of completion for materials 80% Stage of completion for labor and overhead 30% Costs in work in process inventory: Materials $169,100 Labor 67,890 Overhead 17,360 Total costs in beginning work in process $254,350 Units started into production in January 60,000 Units completed and transferred in January 57,500 Costs added to production: Materials $263,640 Labor 292,815 Overhead 60,300 Total costs added into production in January $616,755 Work in process ending: Units in process 25,500 Stage of completion for materials 50% Stage of completion for labor and overhead 10%.

WATERWAYS CORPORATION Molding Department Production Report For the Quarter Ended January 31January 31For the Month of January For the Month of JanuaryJanuary 31For the Quarter Ended January 31
				Equivalent Units
Quantities		Physical Units		Materials		Conversion Costs
Units to be accounted for
Work in process, Jan. 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, Jan. 31
Total units
Costs				Materials		Conversion Costs		Total
Unit costs
Costs in January				$		$		$
Equivalent units
Unit costs				$		$		$
Costs to be accounted for
Work in process, Jan. 1								$
Started into production
Total costs								$
Cost Reconciliation Schedule
Costs accounted for
Transferred out								$
Work in process, Jan. 31
Materials
Conversion costs
Total costs								$

Answer 1

1. Calculation of Equivalent units

	Physical units	Materials	Conversion
Units to be accounted for
Work in process, Jan 1	23,000
Started into production	60,000
Total units	83,000
Units accounted for
Transferred out	57,500	57,500	57,500
Work in process, Jan 31	25,500	12,750	2,550
Total units	83,000	70,250	60,050

Costs

Calculation of unit costs

	Materials	Conversion	Total
Costs in January	$432,740	$438,365	$871,105
Equivalent units	70,250	60,250
Unit costs	$6.16	$7.3	$13.46

Costs to be accounted for
Work in process, Jan 1	$254,350
Started into production	$616,755
Total costs	$871,105

Cost reconciliation schedule

Costs accounted for
Transferred out(57,500×$13.46)	$773,950
Work in process, Jan 31
Materials(12,750×$6.16)	$78,540
Conversion costs(2,550×$7.3)	$18,615	$97,155
Total costs	$871,105

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