Process costing

Rose company uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Work in process, beginning: Units in process ........................................................... 100 Stage of completion with respect to materials ............ 70% Stage of completion with respect to conversion.......... 90% Costs in the beginning inventory: Materials cost ........................................................... $182 Conversion cost ........................................................ $3,429 Units started into production during the month .............. 10,000 Units completed and transferred out .............................. 9,700 Costs added to production during the month: Materials cost .............................................................. $27,986 Conversion cost ........................................................... $373,815 Work in process, ending: Units in process ........................................................... 400 Stage of completion with respect to materials ............ 90% Stage of completion with respect to conversion.......... 70% Required: Using the weighted-average method: a. Determine the equivalent units of production for materials and conversion costs. b. Determine the cost per equivalent unit for materials and conversion costs. c. Determine the cost of units transferred out of the department during the month. d. Determine the cost of ending work in process inventory in the department. Budgeting The company is preparing budget for the next year. The estimated sales are as follows:

Month 1 Month2 Month 4 Month 5

6000 units 7000 units 5500 units 6000 units

40% of each months sales should be produced in the month of the sale and the rest should be produced in the previous month.

50% of the direct materials required for each months production will be purchased in the previous month and the balance in the month of production. The cost of material per unit is $5.

Calculate:

The production budget in units for Month 1

Material cost budget for Month 2