Analysis of a Work in Process Account . Work Problem 5-34 using the weighted average cost method.

Problem 5-34

Broadway Pharmaceutical Company manufactures a tablet for allergy sufferers. All ingredients are added at the begin- ning of the Blending Operation. Conversion costs flow uniformly throughout the process. Tabulating and Coating are operations downstream from Blending. In- formation on the Blending Operation for October is as follows:

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October 1, balance (100,000 units, 40% complete Work in Process-Blending Operation for conversion costs) Direct materials added (1,000,000 units) 151,760 Completed and transferred to Tabulating: Units -? Costs - ? 1,310,000 ? Direct labor cost Factory overhead (applied at 180% of 396,000 direct labor cost) October 31, balance (200,000 units, 70% complete for conversion costs) ? The October 1 balance consists of the following cost elements: Required: Direct materials.. Direct labor Factory overhead Total costs $128,000 8,800 14,960 $151,760 1. Compute the amount of direct labor cost for the period. 2. Calculate the unit costs for direct materials, direct labor, and factory overhead for the current month (October). Direct labor and factory overhead should be separate; do not combine them into one figure. 3. Calculate the unit costs for direct materials, direct labor, and factory overhead in the inventory at the beginning of October 4. Compare the unit costs computed in Parts (2) and (3). Explain what informa- tion this comparison gives to a manager.