Sticky Fingers Corp is a manufacturer of gluten-free cinnamon rolls that are packaged and sold in quantities of six rolls. Sticky has chosen to implement a process costing system to account for their production costs at the recommendation of the head cost accountant, Trevor. He examined their records for the most current year and compiled the following information:
Beginning Work-in-Progress (WIP) Inventory: 256 units that are 100% completed for Direct Materials (DM) and 68% completed for Conversion Costs (CC)
Units Started During the Period: 18,540
Units Completed by the End of the Period: 16,400
Ending WIP Inventory: x units that are 100% completed for DM and 60% completed for CC
Their beginning inventory includes the following costs: DM, $343; and CC, $652. During the most recent year, Sticky added the following costs: DM, $48,900; and CC, $58,777. Using the Weighted-Average method, how much total cost should be assigned to the units completed this period?
(Do not round intermediate calculations.)

Question

Quizplus · Accepted Answer

(Total cost calculated in steps 3 and 5 of process costing may vary due to rounding.) This question requires walking through all five of the process costing steps. To begin, first determine how many units to account for, and that will also inform you of the ending inventory. The first step is to verify physical units in the period and their degree of completion. Units in beginning WIP inventory plus units started this period- 256 + 18,540 = 18,796 total units to account for. Now, determine the ending inventory by deducting the units completed from the total units to account for: 18,796 - 16,400 = 2,396 units.
In step two, account for equivalent units. Using the Weighted-Average method, there will not be a separate assessment of beginning inventory. Direct Materials: (16,400 × 100%) + (2,396 × 100%) = 18,796 equivalent units. Conversion Costs: (16,400 × 100%) + (2,396 × 60%) = 16,400 + 1,437.6 = 17,837.6 equivalent units. In step three, account for costs: Direct Materials, $48,900 + $343 = $49,243; and Conversion Costs, $58,777 + $652 = $59,429. During step four, calculate the cost per equivalent unit: Direct Materials, 49,243/18,796 = $2.6199; and Conversion Costs, $59,429/17,837.6 = $3.3317. Finally, step five requires allocation of costs based on the equivalent units calculated. The end result should appear as follows:
 11ee941a_b6ec_8ba2_bdb6_8d8fd87397e4_TBW1041_00

Sticky Fingers Corp Is a Manufacturer of Gluten-Free Cinnamon Rolls