Question

Company manufactures one product that goes through one processing department called Mixing. All raw materials are introduced at the start of work in the Mixing Department. The company uses the weighted-average method of process costing. Its Work in Process T-account for the Mixing Department for June follows (all forthcoming questions pertain to June):

Work in Process—Mixing Department
June 1 balance	25,000	Completed and transferred to Finished Goods	?
Materials	157,080
Direct labor	99,500
Overhead	117,000
June 30 balance	?

The June 1 work in process inventory consisted of 4,000 units with $13,020 in materials cost and $11,980 in conversion cost. The June 1 work in process inventory was 100% complete with respect to materials and 60% complete with respect to conversion. During June, 36,500 units were started into production. The June 30 work in process inventory consisted of 9,600 units that were 100% complete with respect to materials and 50% complete with respect to conversion.

1. Prepare the journal entry to record the transfer of costs from Work in Process to Finished Goods. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2-a. What is the total cost to be accounted for?

2-b. What is the total cost accounted for?

Answer 1

Unit transferred out = 4000+36500-9600 = 30900

Equivalent unit of material = 30900+9600 = 40500

Equivalent unit of conversion = 30900+(9600*50%) = 35700

Cost per equivalent unit of material = (13020+157080)/40500 = 4.20

Cost per equivalent unit of conversion = (11980+99500+117000)/35700 = 6.40

1) Journal entry

Date	account and explanation	Debit	Credit
	Finished goods (10.60*30900)	327540
	Work in process		327540

2a) Total cost to be accounted for = Beginning WIP+Cost added = 25000+157080+99500+117000 = 398580

Total Cost accounted for = Unit transferred out+Ending WIP = 327540+(9600*4.2+4800*6.4) = 398580