Nader Paints makes an environmentally sound paint

Problem 8.42 Nader Paints makes an environmentally sound paint. The following data are available for the month of April:

Beginning WIP inventory, April
Direct materials
Conversion costs
Units started in April
Costs incurred in April:
Direct materials
Conversion costs
Ending WIP inventory
Direct materials
Conversion costs
Spoilage
Direct materials
Conversion costs

Required:
a. Prepare a production cost report using weighted-average costing
b. Show the flow of costs through the WIP Inventory T-account

a) Prepare a production cost report using weighted-average costing.

% of Completion Equivalent Units
DM Conversion

Beginning work in process 11,000 75% and 70% 8,250 7,700
Units started in April 6,000 6,000 6,000
Ending work in process 3,000 80% and 60% 2,400 1,800
Spoilage 200 100% 200 200
Units completed and
Transferred out 13,800

Units completed and 13,800 13,800 13,800
Transferred out
Ending work in process 3,000 80% and 60% 2,400 1,800
Total units to accounted for 16,800

Total equivalent units 16,200 15,600

DM Conversion Total
Work in process $3,200 $1,450 $4,650
Cost added during the month............... $16,000 $15,800 $31,800
Total costs to account for $19,200 $17,250 $36,450

Equivalent unit 16,200 15,600

Costs per equivalent unit $1.19 $1.11 $2.30

$19,200 $17,250 $1.19 + $1.11
16,200 15,600
Cost of goods completed and transferred out during April

(No. of units transferred out x total cost per equivalent unit)

13,800 x $2.30 $31,740

Cost remaining in April 30 work in process inventory

Direct material:

(No. of equivalent units of direct material x cost per equivalent unit of direct material)

2,400 x $1.19 $2,856

Conversion:

(No. of equivalent units of conversion x cost per equivalent unit of conversion)

1,800 x $1.11 $1,998

Total cost of April 30 work in process $4,854

Note: Cost of goods completed and transferred out during April + Total cost of April 30 work in process should be equal to total costs to account for. However, due to the calculation, there may be small difference in total number.

b) Show the flow of costs through the WIP Inventory T-account.

Work in Process Inventory

April 1 balance 4,650 Cost of goods completed 31,740
April cost of direct material, 31,800 and transferred out
direct labor, and applied
Manufacturing overhead
April 30 balance 4,854

PFA