The following partially completed process cost summary describes the July production activities of Ashad Company. Its production output is sent to its warehouse for shipping. All direct materials are added to products when processing begins. Beginning goods in process inventory is 20% complete with respect to direct labor and overhead.

Equivalent units of production Direct Materials Direct Labor Factory Overhead
Units transferred out 122,000 122,000 122,000
Units of ending goods in process 19,000 13,300 13,300
Equivalent units of production 141,000 135,300 135,300
Costs Direct Materials Direct Labor Factory Overhead
Costs of beginning goods in process $38,600 $1,480 $2,960
Costs incurred this period 751,000 133,820 267,640
Total costs $789,600 $135,300 $270,600
U
nits in beginning goods in process (all completed during July): 8,000

Units started this period: 133,000

Units completed and transferred out: 122,000

Units in ending goods in process: 19,000

*Prepare its process cost summary using the weighted-average method.

We will prepare production and cost table, total cost will be divided by the total units produced to identify the cost per unit incurred on material, labor and overheads.

Cost opening Current Total Complete Closing Equiv. Cost

Head Cost Cost Cost units WIP Units Per unit

Material 38,600 751,000 789,600 122,000 19,000 141,000 5.6000

Labor 1,480 138,820 140,300 122,000 13,300 135,300 1.0370

O.H 2,960 267,640 270,600 122,000 13,300 135,300 2.0000

Step-3

In this process we will calculate the cost incurred during the period.

Complete 122,000 8.64 1,053,708

Closing Wip

Material 19,000 5.60 106,400

Labor 13,300 1.04 13,792

Overheads 13,300 2.00 26,600

146,792

Total Cost 1,200,500