Question

Harbor Manufacturing Company uses a process cost accounting system. Materials are added at the beginning of the process. Direct labor and overhead are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process cost accounting. The following are the operating and cost data information for October. The October 1 beginning Goods in Process Inventory consisted of 20,000 units. The costs for this inventory are $82,500 of direct materials, $24,400 of direct labor, and $48,800 of factory overhead. Factory overhead is applied at 200% of direct labor cost. In addition to the beginning inventory costs, the company issued the following costs into Goods in Process Inventory; direct materials, $240,000; direct labor, $68,000; factory overhead, $136,000. During October, the company completed and transferred 60,000 units of its product to finished goods. At the end of the month, the goods in process inventory consisted of 15,000 units that were 40% complete with respect to direct labor and factory overhead and 100% complete with respect to materials. Prepare the company's process cost summary for October using the weighted average method.

Answer 1

Process cost summary :

	Physical Unit	EUP-Material	EUP-Conversion
Unit accounted for
Beginning work in process	20000
Unit started	55000
Total Units accounted for	75000
Unit accounted as
Unit completed and transferred out	60000	60000	60000
Ending work in process	15000	15000	15000*40% = 6000
Total Units accounted as	75000
Total equivalent unit		75000	6000
Cost information
		Material	Conversion	Total
Beginning work in process		82500	73200	155700
Cost added		240000	204000	228000
Total Cost		322500	277200	599700
Equivalent unit		75000	66000
Unit Cost		4.3	4.2	8.5
Cost reconciliation
Cost accounted as
Cost of unit transferred out		60000*4.3 = 258000	60000*4.2 = 252000	510000
Cost of ending work in process		15000*4.3 = 64500	6000*4.2 = 25200	89700
Total Cost accounted as				599700