Portal Manufacturing, Which Began Business in 2011, Uses a Weighted-Average $\quad$

question 39

Essay

Portal Manufacturing, which began business in 2011, uses a weighted-average process-costing system. The following figures pertain to July: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\underline {\text { Physical }}$ $\quad$ $\quad$$\underline {\text { Equivalent Tonts }}$

$\begin{array}{lrr}& \underline { \text { Units } }& \underline{\text { Materials }} & \underline{\text { Conversion }} \\\text { Units completed } &120,000 & 120,000 & 120,000 \\\text { Ending work in process } & 40,000 & 40,000 & 18,000\end{array}$ All materials are introduced at the start of the process, and conversion costs are incurred evenly throughout production. The company used direct materials that cost $640,000; conversion amounted to $8 per equivalent unit.
Required:
A. Calculate the direct materials cost per equivalent unit.
B. Calculate the cost of units completed and transferred.
C. What percentage of conversion work will be performed on the 40,000-unit ending work-in-process inventory during August?
D. In all likelihood, were all of the 120,000 completed units begun in July? Explain.

---

Definitions:

Direct Competition

Occurs when businesses offer products or services that are exactly or very similar to each other, serving the same customers in the same market.

Substitute Competition

The competitive dynamic that occurs between products or services that can serve as replacements for each other.

Consumer Ethnocentrism

A belief by residents of a country that it is inappropriate or immoral to purchase foreign-made goods and services.

Environmental Scanning

The continuous process of gathering information about events and trends in the environment external to an organization to assist in strategic planning.