Jupiter Corporation manufactures home security devices. During 20x4, 1,000,000 units were completed and transferred to finished-goods inventory. On December 31, 20x4, there were 310,000 units in work in process. These units were 48 percent complete as to conversion and 100 percent complete as to direct material. Finished-goods inventory consisted of 250,000 units. Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each product at the rate of 100 percent of direct-labor costs. There was no finished-goods inventory on January 1, 20x4. A review of the inventory cost records disclosed the following information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Note to instructors: This problem relates to problem 12 in the supplement, Process Costing: The First-in, First-Out Method. Assigning these two problems together facilitates a comparison of the weighted-average and FIFO methods.

 

 

 

156                                Chapter 4 Process Costing and Hybrid Product-Costing Systems

 

Required:         Prepare schedules as of December 31, 20x4, to compute the following:

1.      Physical flow of units.

2.      Equivalent units of production using the weighted-average method.

3.      Costs per equivalent unit for material and conversion.

4.      Cost of the December 31, 20x4, finished-goods inventory and work-in-process inventory.

(CPA, adapted)