Problem:
Weighted-average method, assigning costs.Bio Doc Corporation is a biotech company based in Milpitas. It makes a cancer-treatment drug in a single processing department. Direct materials are added at the start of the process. Conversion costs are added evenly during the process. Bio Doc uses the weighted-average method of process costing. The following information for July 2011 is available.
Physical Direct Conversion
Units Materials Costs
Work in process, July 1 8,500a8,500 1,700
Started during July 35,000
Completed and transferred out during July
33,000 33,000 33,000
Work in process, July 31 10,500b 10,500 6,300
aDegree of completion: direct materials, 100%; conversion costs, 20%.
bDegree of completion: direct materials, 100%; conversion costs, 60%.
Total Costs for July 2008
Work in process, beginning
Direct materials $63,100
Conversion costs 45,510$108,610
Direct materials added during July 284,900
Conversion costs added during July 485,040
Total costs to account for$878,550
Question 1. Calculate cost per equivalent unit for direct materials and conversion costs.
Question 2. Summarize total costs to account for, and assign total costs to units completed (and transferred out) and to units in ending work in process.
Do above problem using the FIFO method. Note that you first need to calculate the equivalent units of work Required done in the current period (for direct materials and conversion costs) to complete beginning work in process, to start and complete new units, and to produce ending work in process