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    HGGHGHG

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    Tricia Mae
    RJ Inc uses a weighted average process costing system to manufacture its product "COLOREE". The summary provides production and cost data for the year ending December 31, 2023. Using this data, the equivalent units of production and cost per unit are calculated for direct materials and conversion cost. The cost per equivalent unit of production for direct materials is $26 and for conversion cost is $97.

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    HGGHGHG

    Uploaded by

    Tricia Mae
    93 views2 pages
    RJ Inc uses a weighted average process costing system to manufacture its product "COLOREE". The summary provides production and cost data for the year ending December 31, 2023. Using this data, the equivalent units of production and cost per unit are calculated for direct materials and conversion cost. The cost per equivalent unit of production for direct materials is $26 and for conversion cost is $97.

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    RJ Inc uses a weighted average process costing system to manufacture its product "COLOREE". The summary provides production and cost data for the year ending December 31, 2023. Using this data, the equivalent units of production and cost per unit are calculated for direct materials and conversion cost. The cost per equivalent unit of production for direct materials is $26 and for conversion cost is $97.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    93 views2 pages

    HGGHGHG

    Uploaded by

    Tricia Mae
    RJ Inc uses a weighted average process costing system to manufacture its product "COLOREE". The summary provides production and cost data for the year ending December 31, 2023. Using this data, the equivalent units of production and cost per unit are calculated for direct materials and conversion cost. The cost per equivalent unit of production for direct materials is $26 and for conversion cost is $97.

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    Required: Equivalent production for materials and conversion cost using (a) Weighted Average method

    and (b) FIFO method.

    Problem 2. RJ Inc. is a company manufacturing a product known as “COLOREE” which undergoes a


    uniform process prior to its completion. RJ Inc. employs weighted average process costing system for
    this product. For the year ended December 31, 2023, the following data are provided by the company:

    a. The work-in-process inventory on January 1, 2023 is 10,000 units which are 80% incomplete as
    regards to conversion cost while the work-in-process inventory on December 31, 2023 is 60%
    complete as to regards to conversion cost.
    b. The total units started during the year amounted to 90,000 units while the total units
    manufactured during the year amounted to 70,000 units.
    c. There is no spoilage during the period.
    d. It is the company’s policy to apply direct labor and factory overhead evenly throughout the
    period while 2/5 of direct materials are added at the start of the process while the remaining
    direct materials are added at the end of the process.
    e. The cost of January 1, 2023 work-in-process inventory consists of P100,000—direct materials,
    P200,000 direct labor, and P300,000 factory overhead.
    f. The total manufacturing cost for the year consisted of P2M—direct material, P5M—direct labor
    and P3M—factory overhead.

    What is the cost per equivalent unit of production of Direct Material and Conversion Cost,
    respectively?

    ANSWER:

    EUP
    Units Materials Conversion Cost
    WIP Beginning 10,000
    Units Started 90,000
    Total units to account for 100,000

    WIP Beginning 10,000 4,000 10,000


    Started and
    Completed 60,000 60,000 60,000
    Total Completed 70,000
    WIP Ending 30,000 18,000 18,000
    Total units accounted for 100,000 82,000 88,000

    Materials Conversion Cost


    WIP Beginning 100,000 500,000
    Cost Added (Total Manufacturing 2,000,00 8,000,000
    Cost) 0
    2,100,00
    Total Cost to Account 0 8,500,000
    Divide by EUP 82,000 88,000
    25.61 or
    Cost per EUP 26 96.59 or 97

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