Process Costing

Project Description:

Rondelle Supplies is a manufacturer of plastic parts that uses the weighted-average process costing method to account for costs of production. It produces parts in three separate departments: Molding, Assembling, and Packaging. The following information was obtained for the Assembling Department for the month of April.

Work in process (WIP) on April 1 had 75,000 units made up of the following:

	Amount	Degree of Completion
Prior department costs transferred in from the Molding Department Costs added by the Assembling Department	$192,000	100%
Direct materials	$120,000	100%
Direct labor	$43,200	60%
Manufacturing overhead	$27,600	50%
Total	$190,800
Work in process, April 1	$382,000

 

During April, 375,000 units were transferred in from the Molding Department at a cost of $960,000. The Assembling Department added the following costs.

Direct materials	$576,000
Direct labor	$216,000
Manufacturing overhead	$113,400
Total costs added	$905,400

 

Assembling finished 300,000 units and transferred them to the Packaging Department.

At April 30, 150,000 units were still in work-in-process inventory. The degree of completion of work-in-process inventory at April 30 was as follows.

Direct materials	90%
Direct labor	70%
Manufacturing overhead	35%

 

 

 

 

 

 

Refer to your textbook (Chapter 8 pp. 337-343) and article "Weighted Average Cost Method of Calculating Inventory" and answer the questions below:

 

1. How would you define Weighted-Average Process Costing Method? Why would some companies prefer to use it?

 

2. Formulate a production cost report using the weighted-average method. Use the template on the next page (fill in the highlighted cells) and round up the "Cost per equivalent unit" to 2 digits.

 

 

 

Rondelle Supplies
Assembling Department
Production Cost Report - Weighted-Average
	Physical Units	Total Costs	Prior Department Costs	Materials	Labor	Manufacturing Overhead
Flow of Production Units
Units to be accounted for:
Beginning WIP inventory
Units started this period
Total units to be accounted for
Units accounted for:
Units completed and transferred out:
From beginning inventory
Started and completed currently
Total transferred out
Units in ending WIP inventory
Total units accounted for
Costs to be accounted for:
Costs in beginning WIP inventory
Current period costs
Total costs to be accounted for
Costs per equivalent unit:
Prior department costs
Materials
Labor
Manufacturing overhead
Costs accounted for:
Costs assigned to units transferred out:
Prior department costs
Materials
Labor
Manufacturing overhead
Total costs of units transferred out
Costs assigned to ending WIP inventory:
Prior department costs
Materials
Labor
Manufacturing overhead
Total ending WIP inventory
Total costs accounted for