Problem 3-4B Weighted average: Process cost summary equivalent units; cost estimates Switch Co. manufactures a single product in one department. Direct labor and overhead are added evenly throughout the process. Direct materials are added as needed. The company uses monthly reporting pe riods for its weighted-average process costing. During January, Switch completed and transferred 220,000 units of product to finished goods inventory. Its 10,000 units of beginning work in process con- sisted of $7,500 of direct materials and $49,850 of conversion. In process at month-end are 40,000 unit (50% complete with respect to direct materials and 30% complete with respect to conversion) During the month, the company used direct materials of $112,500 in production and incurred conversion costs of $616,000 Required Check (1) EUP for conversion, 232,000 1. Prepare the company's process cost summary for January using the weighted-average method. 2. Prepare the journal entry dated January 31 to transfer the cost of completed units to finished goods (2) Cost transferred inventory out to finished goods $741,400 Analysis Component The cost accounting process depends on several estimates. a. Identify two major estimates that affect the cost per equivalent unit. b. In what direction might you anticipate a bias from management for each estimate in part 3a (as- sume that management compensation is based on maintaining low inventory amounts)? Explain your answer Problem 3-584 FIFO: Process cost summary, equivalent Refer to the information in Problem 3-4B. Assume that Switch uses the FIFO method to account for its process costing system. The following additional information is available. Beginning work in process consists of 10,000 units that were 75% complete with respect to direct ma- terials and 60% complete with respect to conversion. . units; cost estimates C3 C4 P4 Of the 220,000 units completed, 10,000 were from beginning work in process; the remaining 210,000 were units started and completed during January Required Check (1) Conversion EUP 1. Prepare the company's process cost summary for January using FIFO. Round cost per EUP to thre 2) Cost transferred 2. Prepare the journal entry dated January 31 to transfer the cost of completed units to finished goods 226,000 decimal places. out, $743,554 inventory Problem 3-4B Weighted average: Process cost summary equivalent units; cost estimates Switch Co. manufactures a single product in one department. Direct labor and overhead are added evenly throughout the process. Direct materials are added as needed. The company uses monthly reporting pe riods for its weighted-average process costing. During January, Switch completed and transferred 220,000 units of product to finished goods inventory. Its 10,000 units of beginning work in process con- sisted of $7,500 of direct materials and $49,850 of conversion. In process at month-end are 40,000 unit (50% complete with respect to direct materials and 30% complete with respect to conversion) During the month, the company used direct materials of $112,500 in production and incurred conversion costs of $616,000 Required Check (1) EUP for conversion, 232,000 1. Prepare the company's process cost summary for January using the weighted-average method. 2. Prepare the journal entry dated January 31 to transfer the cost of completed units to finished goods (2) Cost transferred inventory out to finished goods $741,400 Analysis Component The cost accounting process depends on several estimates. a. Identify two major estimates that affect the cost per equivalent unit. b. In what direction might you anticipate a bias from management for each estimate in part 3a (as- sume that management compensation is based on maintaining low inventory amounts)? Explain your answer Problem 3-584 FIFO: Process cost summary, equivalent Refer to the information in Problem 3-4B. Assume that Switch uses the FIFO method to account for its process costing system. The following additional information is available. Beginning work in process consists of 10,000 units that were 75% complete with respect to direct ma- terials and 60% complete with respect to conversion. . units; cost estimates C3 C4 P4 Of the 220,000 units completed, 10,000 were from beginning work in process; the remaining 210,000 were units started and completed during January Required Check (1) Conversion EUP 1. Prepare the company's process cost summary for January using FIFO. Round cost per EUP to thre 2) Cost transferred 2. Prepare the journal entry dated January 31 to transfer the cost of completed units to finished goods 226,000 decimal places. out, $743,554 inventory
