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Process Costing Packaging Department Direct materials are added 70% at the beginning of the process and the remaining 30% are added when the chips are

Process Costing Packaging Department

Direct materials are added 70% at the beginning of the process and the remaining 30% are added when the chips are 50% complete with the packaging process. Direct labor and overhead are added evenly throughout the process.

Table 8 Unit and cost information

Cost

Physical Units

Transferred-in

Direct Materials

Direct Labor

Overhead

Beg WIP

1,000 (40% complete)

$5,550

$110.40

$210

$225.80

Transferred In

30,000

$73,500

End WIP

2,200 (30% complete)

Added during Qtr 1:

Direct Materials -- $4,835.02

Direct Labor 1,580 hrs @ $8.10 per hour

Overhead OH is applied based on predetermined OH rate and actual DL hours

1. Determine the number of units completed during quarter 1.

2. Compute the equivalent units using the weighted average method

3. Compute the cost per equivalent unit using the weighted average method

4. Compute the cost of goods transferred to finished goods inventory

5. Compute the ending balance in WIP, Packaging

Table 10 Actual Results (calculate revenue and COGS)

Units sold

Sales Price

Revenue

Units sold

Cost per unit

COGS

Table 11 DM Variances (potatoes only)

Price Variance

Usage Variance

Total Variance

Calculations:

Table 12 Direct Labor Variances

Rate Variance

Efficiency Variance

Total Variance

Calculations:

#13 Calculations (Minimum price on special order)

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