Chapter 16 Process Costing and Analysis Abraham Company uses proce tion processes. Conversion beginning of the first pro During September, the first work in process consisted complete with respect to conver 78,000 units were started and Problem 16-20 Weighted average: Cost per equivalent ur costs assigned to proc C2 C3 y uses process costing to account for its production costs. The company has two produc. conversion is added evenly throughout each process. Direct materials are added at the mg of the first process. Additional information for the first process follows. prember, the first process transferred 80,000 units of product to the next process. Beginning Process consisted of 2.000 units that were 100% complete with respect to direct materials and 85% vith respect to conversion of the units completed. 2.000 were from beginning work in process and Its were started and completed during the period. Beginning work in process had $58,000 of direct materials and 586,400 of conversion cost. At the end of September, the work in process inventory consists of 00 units that are 25% complete with respect to conversion. The direct materials cost added in September 12,000, and conversion cost added is $1,980,000. The company uses the weighted average method. Required For the first process: 1. Determine the equivalent units of production with respect to (a) conversion and (b) direct materials. 2. Compute both the conversion cost and the direct materials cost per equivalent unit. 3. Compute both conversion cost and direct materials cost assiened to (a) units completed and trans ferred out and (b) ending work in process inventory. Analysis Component 4. Assume that an error is made in determining the percentage of completion for units in ending inven- tory in the first process. Instead of being 25% complete with respect to conversion, they are actually 75% complete. Write a one-page memo to the plant manager describing how this error affects its September financial statements. Check (2) Conversion per equivalent unit 52 (36) $120,400