n calculating unit cost in a process costing system, "conversioncost" is defined as the sum of:
| | Direct and indirect material costs. |
| | Direct and indirect labor costs. |
| | Direct labor and factory overhead costs. |
| | Indirect labor and factory overhead costs. |
| | Indirect material and factory overhead costs. |
Units accounted for includes units completed and transferred outplus:
| | Beginning inventory. |
| | Units to account for. |
| | Ending inventory. |
| | Units started. |
Matrix Inc. calculates cost for an equivalent unit of productionusing both the weighted-average and the FIFO methods.
| Data for July: | |
| Work-in-process inventory, July 1 (36,000 units): | |
| Direct materials (100% completed) | $122,400 |
| Conversion (50% completed) | 76,800 |
| Balance in work in process inventory,July 1 | $199,200 |
| Units started during July | 90,000 |
| Units completed and transferred | 102,000 |
| Work-in-process inventory, July 31: | |
| Direct materials (100% completed) | 24,000 |
| Conversion (50% completed) | |
| Cost incurred during July: | |
| Direct materials | $180,000 |
| Conversion costs | 288,000 |
The cost of goods completed and transferred out under theweighted-average method is calculated to be:
| | $96,000. |
| | $476,400. |
| | $571,200. |
| | $484,000. |
| | $468,200. |
Talamoto Co. manufactures a single product that goes through twoprocesses — mixing and cooking. The following data pertains to theMixing Department for September.
| Work-in-process Inventory Sept. 1 | 28,000 | units |
| Conversion complete | 70% | |
| Work-in-process inventory Sept. 30 | 16,000 | units |
| Conversion complete | 50% | |
| Units started into production in Sept. | 72,000 | |
| Units completed and transferred out | ? | units |
| Costs | | |
| Work-in-process inventory Sept.1 | $120,000 | |
| Material P | 110,000 | |
| Material Q | 165,000 | |
| Conversion | | |
| Costs added in September | | |
| Material P | $180,000 | |
| Material Q | 165,000 | |
| Conversion | 354,800 | |
Material P is added at the beginning of work in the MixingDepartment. Material Q is also added in the Mixing Department, butnot until units of product are forty percent completed with regardto conversion. Conversion costs are incurred uniformly during theprocess.
Total equivalent units for Material P under the weighted-averagemethod are calculated to be:
| | 100,000 equivalent units. |
| | 92,000 equivalent units. |
| | 84,000 equivalent units. |
| | 72,000 equivalent units. |
| | 68,000 equivalent units. |
