Glen Manufacturing Company uses a process costing system to account for the production of cleaning

Production:
10,000 units (50% complete as to conversion costs) beginning work in process (WIP)
38,000 units finished and transferred out
Ending WIP comprises 4,500 units that are 40% complete as to conversion costs
Manufacturing costs:
1/7/15 Opening WIP Materials $4,000
1/7/15 Opening WIP Manufacturing overhead & Direct Labour $6,000
Materials $54,000
Direct labour $45,000
Manufacturing overhead $56,000

Required:
Calculate the cost per finished goods and the cost per closing WIP for the Mixing Department for the m
SOLUTION
GLEN MANAUFACTURING COMPANY
PRODUCT REPORT
JULY
WEIGHTED AVERAGE METHOD

STEP 1: CALCULATION FOR PHYSICAL AND EQUIVALENT UNITS

Description

No. of Units

%age Completed
D.M

Opening
Finished
Ending Wip
No. of Equivalent Units

10000
38000
4500

100%
100%
100%

STEP 2: CALCULATION FOR PER UNIT EQUIVALENT COST OF PRODUCTION

DESCRIPTION
Total D.M Cost Incurred During July (4000+54000)
Total Conversion Cost Incurred during July (6000+45000+56000)
EQUIVALENT UNITS
PER UNIT EQUIVALENT COST

STEP 3: ASSIGNING THE EQUIVALENT UNITS COST TO ENDING AND COMPLETED UNITS
DESCRIPTION
Ending Units (D.M 4500x1.36) (CONVERSION 1800x2.69)
Completed and Transferred Out Units (D.M 38000x1.36) (CONVERSION 38000x2.69)

Outcome: (Weighted Average Method)

Cost of Ending Units
Cost of Completed and Transferred Out Units

$10,962
$153,900

to account for the production of cleaning liquids and all materials are added at the beginning of operations in the M

beginning work in process (WIP)

mplete as to conversion costs

ct Labour $6,000

WIP for the Mixing Department for the month of July using Weighted Average Method.

%age Completed
Conversion
50%
100%
40%

+54000)
+45000+56000)

EQUILANT UNITS
D.M
Conversion

38000
4500
42500

38000
1800
39800

D.M
58000

Conversion
107000

42500
1.36

39800
2.69

D.M

Conversion

N 1800x2.69)

6120

4842

ONVERSION 38000x2.69)

51680
57800

COMPLETED UNITS

102220
107062

10962
153900

ning of operations in the Mixing Department. The following production and manufacturing cost data for the Depar

ost data for the Department are available for July.

Glen Manufacturing Company uses a process costing system to account for the production of cleaning
Production:
10,000 units (50% complete as to conversion costs) beginning work in process (WIP)
38,000 units finished and transferred out
Ending WIP comprises 4,500 units that are 40% complete as to conversion costs
Manufacturing costs:
1/7/15 Opening WIP Materials $4,000
1/7/15 Opening WIP Manufacturing overhead & Direct Labour $6,000
Materials $54,000
Direct labour $45,000
Manufacturing overhead $56,000

Required:
Calculate the cost per finished goods and the cost per closing WIP for the Mixing Department for the m
SOLUTION
GLEN MANAUFACTURING COMPANY
PRODUCT REPORT
JULY
FIRST IN FIRST OUT METHOD

STEP 1: CALCULATION FOR PHYSICAL AND EQUIVALENT UNITS

Description

No. of Units

Opening
Finished
Ending Wip
No. of Equivalent Units

10000
38000
4500

%age Completed
D.M
100%
100%
100%

STEP 2: CALCULATION FOR PER UNIT EQUIVALENT COST OF PRODUCTION

DESCRIPTION
Total D.M Cost Incurred During July (54000)
Total Conversion Cost Incurred during July (45000+56000)
EQUIVALENT UNITS
PER UNIT EQUIVALENT COST

STEP 3: ASSIGNING THE EQUIVALENT UNITS COST TO ENDING AND COMPLETED UNITS
DESCRIPTION
Cost of Units Started Last month Completed Last month
Cost of Units Started Last month Completed This month

Cost of Units Started This month Completed This month

Cost of Units Started this Month but remained Unfinished (Ending)

Outcome: (Weighted Average Method)

Cost of Ending Units
Cost of Completed and Transferred Out Units

$9,765
$133,760

ount for the production of cleaning liquids and all materials are added at the beginning of operations in the Mixing

ning work in process (WIP)

as to conversion costs

our $6,000

or the Mixing Department for the month of July using Weighted Average Method.

%age Completed
Conversion
50%
100%
40%

EQUILANT UNITS
D.M
Conversion
0
38000
4500
42500

5000
38000
1800
44800

D.M
54000

Conversion

00)

101000

42500
1.27

44800
2.25

D.M

Conversion

th

4000

6000

th

11250

LETED UNITS

10000
11250

th

Ending)

48260

85500

5715

4050

133760
9765

of operations in the Mixing Department. The following production and manufacturing cost data for the Departmen

data for the Department are available for July.