The Assembly Department Uses a Process Cost Accounting System and a Weighted-Average

question 150

Essay

The Assembly Department uses a process cost accounting system and a weighted-average cost flow assumption. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July $190000 of materials costs and $137100 in conversion costs were charged to the department. The beginning work in process inventory was $93000 on July 1 comprised of $80000 of materials costs and $13000 of conversion costs. Other data for the month of July are as follows:
$\begin{array}{lll}\text { Beginning work in process inventory, } 7 / 1 & 25,000 \text { units } & \text { (40\% complete) } \\\text { Units completed and transferred out } & 70,000 \text { units } & \\\text { Ending work in process inventory, } 7 / 31 & 30,000 \text { units } & \text { (30\% complete) }\end{array}$ Instructions
Answer the following questions and show computations to support your answers.
1. How many physical units have to be accounted for in July?
2. What are the equivalent units of production for materials and for conversion costs for the month of July?
3. What is the total cost assigned to the 70000 units that were transferred out of the process in July?
4. What is the total cost of the July 31 inventory?

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Cash Receipts

The collection of money, typically from sales or services, recorded in the financial accounting records.

Budgeted Materials

Estimated quantities and costs of materials required for production within a specific time frame.

Raw Materials Inventory

This inventory consists of the basic materials and components that are used in the manufacturing process to produce finished goods.