Summer Company uses weighted average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 765,000 units of product to finished goods. At the end of November, the work in process inventory consists of 192,000 units that are 50% complete with respect to conversion. Beginning inventory had $435,435 of direct materials and S107,625 of conversion cost. The direct material cost added in November is $2,914,065, and the conversion cost added is $2,044 875. Beginning work in process consisted of 61,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion of the units completed, 61,000 were from beginning work in process and 704,000 units were started and completed during the period. Total units started during November were 896,000. 1 2 3. Step 1: Determine the physical flow of units (prepare a physical flow reconciliation) 4 5 Beginning WIP inventory Units completed and transferred out 6 Units started this period Ending WIP inventory 7 Total units to account for Total units accounted for 18 Conversion 3 4 9 Step 2: Compute equivalent units (EU) of production 10 Direct Materials 1 EUs completed and transferred out 2 EUs for ending WIP Direct materials Conversion S EUs of production 6 Step 3: Compute cost per EU 8 Direct Materials Cost of beginning WIP Costs incurred this period 1 Total costs + EUs of production = Cost per EU of production Conversion Process Costing G H 18 8 D 5 Beginning WIP inventory Units completed and transferred out 6 Units started this period Ending WIP inventory 7 Total units to account for Total units accounted for 8 9 Step 2: Compute equivalent units (EU) of production 10 Direct Materials Conversion 11 EUs completed and transferred out 12 EUs for ending WIP 13 Direct materials 14 Conversion 15 EUs of production 16 17 Step 3: Compute cost per EU Direct Materials Conversion 19. Cost of beginning WIP 20. Costs incurred this period 21 Total costs 22 - EUs of production 23 - Cost per EU of production 24 25 Step 4: Assign and reconcile costs 26 27 Costs transferred out 28 Direct materials 29 Conversion 80 Total costs transferred out (completed this period) $1. Cost of ending WIP 2 Direct materials 3 Conversion 4 Cost of ending WIP $ Total costs accounted for