Question

Zeus Corporation produces cultured diamonds via a secretive process that grows the diamonds in a vacuum chamber filled with a carbon gas cloud. The diamonds are produced in a single continuous process, and Zeus uses the weighted-average process costing method of accounting for production. The production process requires constant utilization of facilities and equipment, as well as direct labor by skilled technicians. As a result, direct labor and factory overhead are both deemed to be introduced uniformly throughout production.
At the beginning of June, 20X9, 4,000 diamonds were in process. During June, an additional 8,000 diamonds were started, and 7,000 diamonds were completed and transferred to finished goods.
As of the beginning of the month, work in process was 80% complete with respect to materials and 60% complete with respect to conversion costs.
As of the end of the month, work in process was 70% complete with respect to materials and 40% complete with respect to conversion costs.
On the Problem 1 Worksheet, prepare a "unit reconciliation" schedule that includes calculations showing the equivalent units of materials, direct labor, and factory overhead for June. Unit reconciliation:

Answer 1

Input		Output
Beginning Work in Process	4,000	Completed and transferred	7,000
Units Introduced	8,000	Closing Work in Process	5,000
Units to account for	12,000	Units to account for	12,000

Statement of unit reconciliation:

Output	Direct Material	Direct Labor	Factory Overhead
Completed and transferred	7,000	7,000	7,000
Closing Work in Process [50% complete for materials, 40% for conversion costs]	3,500	2,000	2,000
Equivalent Units	10,500	9,000	9,000