Irma Brainy Manufacturing Corporation (IBMC) makes interlocking childrens blocks in a single processing department. Direct materials are added at the start of production. Conversion costs are added evenly throughout production. IBMC uses the weighted-average method of process costing. The following for October 2017 is available.

Equivalent Units

Physical Direct Conversion

Units Materials Costs

Work in process, October 1 12,000

Started in October 48,000

Completed and transferred out during October 55,000 55,000 55,000

Work in process, October 31 5,000 5,000 1,500

Total Costs for October 2017

Work in process, beginning

Direct materials $5,760

Conversion costs 14,825 $20,585

Direct materials added during October 25,440

Conversion costs added during October 58,625

Total cost to account for $104,650

Required:

1. Summarized the total cost of materials to account for and conversion costs to account for.

2. Calculate the cost per equivalent unit for direct materials and conversion costs.

3. Assign costs to units completed (and transferred out) and to units in ending work in process.

4. Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. Assume that cost of units completed and transferred out is $73,255 and cost of units in ending work in process is $31,395, prepare a journal entry to transfer out the cost of goods completed.

Cost Information
	Total	Direct	Conversion
	Costs	Materials	Costs
Work in process, beginning
Costs added in current period
Total costs to account for
Costs incurred to date
Divide by equivalent units
Cost per equivalent unit
Assignment of costs:
Completed and transferred out
Work in process, ending
Total costs accounted for

Journal Entries

Questions:

1. What is the difference between a weighted-average method of process costing and a first-in, first-out method of process costing?

1. Which method reflects more accurately the matching of actual current costs to the period of production? Why?