Mike's manufactures bikes and has two departments, production department and testing department. This problem focuses on the production department. The process-costing system at UB Health has a single direct-cost category (Direct material) and a single indirect-cost category (Conversion cost). All direct materials are added at the beginning of the process, and conversion costs are added evenly during the process. When the production department finishes work on each wheelchair, it is immediately transferred to the testing department. Data for the production department for Dec 2015 are as follows:

Physical units Direct Material Conversion Costs

Beg. WIP 5,000 units $1,250,000 $402,750

Started during Oct. 20,000 units

Completed 22,500 units

Total costs added $4,500,000 $2,337,500

Completion rates

Beg. WIP: 100% for direct materials; 60% for conversion costs

End. WIP: 100% for direct materials; 70% for conversion costs

Required)

1. Complete each of the following process-costing steps.

Physical flow of units

Equivalent units

Summarize costs

Determine cost per equivalent unit

Determine Cost of goods completed and WIP ending balance

2. Prepare journal entries to update the WIP account and record the transfer of completed goods.

*Use process costing for both Weighted Average and FIFO