PB3.

LO 5.3Vexar manufactures nails. Manufacturing is a one-step process where the nails are forged. This is the information related to this year’s production:

Ending inventory was 100% complete as to materials and 70% complete as to conversion, and the total materials cost is $115,080 and the total conversion cost is $72,072. Using the weighted-average method, what are the unit costs if the company transferred out 34,000 units? Using the weighted-average method, prepare the company’s process cost summary for the month.

The unit costs are $ 4.87 for 70 % Conversion Costs

The unit costs are $ 5.54 for finished goods

Explanation:

Total Materials cost = $ 115,080

Material Costs for one unit = $ 115,080 / 34000 = $ 3.3847 = $ 3.39

Conversion Costs = $ 72,072

Conversion Costs for one unit = $ 72072/34000 * 70% = $ 1.4838 = $ 1.48

Total Cost per unit = $ 3.39 + $ 1.48 = $ 4.87

Process Cost summary

Quantity Schedule

Materials = ($3.39 * 34,000) = $ 115,080

Cost Added by Department: Total Cost Unit Cost

Materials = $ 115,080 $ 3.39

Conversion Costs

Labor + Overheads (1.48 * 34,000) = $ 50,320 $ 1.48

Units still in process ($ 72072 - $ 50320) = $ 19,752 $0.58

Total cost to be accounted for $ 187,152 $ 5.54