FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Rich company produces a variety of stationery products. One product, sealing wax sticks,
passes through two processes: blending and molding. The weighted average method is used to
account for the cost of production. Two ingredients, paraffin and pigment are added at the
beginning of the process and heated and mixed for several hours. After blending, the resulting
product is sent to the Molding department, where it is poured into molds and cooled. The
following information relates to the blending process for November:
a) Work in process, November 1, had 20,000 pounds, 20% complete with respect to
conversion costs. Costs associated with partially completed units with
Paraffin $ 120,000
Pigment $ 100,000
Direct Labor $ 30,000
b) Work in process, August 31, had 30,000 pounds, 70% complete with respect to
conversion costs.
c) Units completed and transferred out totaled 500,000 pounds. Costs added during the
month were:
Paraffin $ 3,060,000
Pigment $ 2,550,000
Direct Labor $ 3,877,500
Over applied $ 1,292,500
Required
1. Prepare for the following (a) unit completed (b) an equivalent unit schedule with cost
categories for paraffin, pigment, and conversion costs.
2. Calculate the unit cost for each cost category.
3. Compute the cost of ending work in process and the cost of goods transferred out.
4. Prepare a cost reconciliation.
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