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PB3.
LO 5.3Vexar manufactures nails. Manufacturing is a one-step process where the nails are forged. This is the information related to this year’s production:



Ending inventory was 100% complete as to materials and 70% complete as to conversion, and the total materials cost is $115,080 and the total conversion cost is $72,072. Using the weighted-average method, what are the unit costs if the company transferred out 34,000 units? Using the weighted-average method, prepare the company’s process cost summary for the month.

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akiran007

Answer:

The unit costs are $ 4.87 for 70 % Conversion Costs

The unit costs are $ 5.54 for finished goods

Explanation:

Total Materials cost = $ 115,080

Material Costs  for one unit= $ 115,080/ 34000= $ 3.3847= $ 3.39

Conversion Costs= $ 72,072

Conversion Costs for one unit = $ 72072/34000 * 70%= $ 1.4838= $ 1.48

Total Cost per unit= $ 3.39 + $ 1.48= $ 4.87

Process Cost summary

Quantity Schedule

Materials = ($3.39 *34,000)=                   $ 115,080

Cost Added by Department:                     Total Cost             Unit Cost

Materials=                                                  $ 115,080                $ 3.39

Conversion Costs

Labor + Overheads ( 1.48 * 34,000)=       $ 50,320               $ 1.48

Units still in process ($ 72072- $ 50320) = $ 19,752              $0.58

Total cost to be accounted for                   $ 187,152                $ 5.54

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