Question
A manufacturer uses process costing . It has one direct material cost pool and one conversion cost pool. Information for the month is as follows:
A manufacturer uses process costing. It has one direct material cost pool and one conversion cost pool. Information for the month is as follows:
Beginning of Month End of Month
Work in process: 21,000 units 12,000 units
Conversion (% of completion in WIP): 35% 90%
Costs of Materials in WIP: $ 81,000 ?
Costs of Conversion in WIP: $113,000 ?
During the month:
Units started during the month: 70,000 units
Costs incurred for Materials: $280,000
Costs incurred for Conversion: $270,000
Sales: $920,000
Admin expenses $200,000
Other Information:
85% of direct materials is added at the beginning of the process, and the remaining 15% of direct materials (for packaging) are added at 95% completion.
Two assumption to make things a bit easier:
- There were no raw material inventories at any point of the process.
- There was no beginning or ending finished good inventory.
Required:
Part A: Calculate the total value of ending Work in Process and calculate Cost of Goods Sold, assuming that inventory is based on FIFO.
Part B: Calculate the total value of ending Work in Process and calculate Cost of Goods Sold, assuming that inventory is based on Weighted Average.
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