University Managerial Accounting Homework: Process Costing Solution

This document presents a detailed solution to a managerial accounting assignment focused on process costing using the weighted-average method. It begins with an analysis of the physical flow of units, followed by the calculation of equivalent units for direct materials and conversion costs. Unit costs are then computed, and a comprehensive analysis of total costs is provided, including cost of goods completed and cost of goods remaining in work in process. The solution also addresses a modified cost scenario due to changes in the value of work-in-process stock. The assignment covers all required steps, providing a clear and concise approach to process costing problems, including the application of the weighted-average method to determine unit costs and allocate costs across different stages of production.

Running head: MANAGERIAL ACCOUNTING
MANAGERIAL ACCOUNTING
Name of the Student
Name of the University
Author Note:

1MANAGERIAL ACCOUNTING
Table of Contents
1) Calculation of the Physical Flow Units..............................................................................2
2) Calculation of Equivalent Units..........................................................................................2
3) Computation of Unit Cost...................................................................................................3
4) Analysis of the Total Cost..................................................................................................3
5) Modified Cost due to change in value of WIP stock..........................................................3

2MANAGERIAL ACCOUNTING
1) Calculation of the Physical Flow Units
Physical Units
Work-in-progress (opening stock) $10000
Started with units during the month of April $100000
Total Units $110000
Units completed and transferred to finished good $80000
Units remaining in the work in progress at the month end $30000
Total Units accounted or total physical units flow $110000
2) Calculation of Equivalent Units

3MANAGERIAL ACCOUNTING
3) Computation of Unit Cost
Cost Per Equivalent Unit
Direct Material Conversion Total
Work in Process, April 1
$
22,000
$
4,500
$
26,500
Cost Incurred during the month of
April
$
1,98,000
$
1,58,400
$
3,56,400
Total cost incurred
$
2,20,000
$
1,62,900
$
3,82,900
Equivalent Units
$
1,10,000
$
90,000
Cost per unit equivalent units
$
2.00
$
1.81
$
3.81
4) Analysis of the Total Cost
Cost of goods completed
Number of equivalent
units transferred
Cost per equivalent
units of Direct Material
Cost of goods
completed
Cost of Goods Completed
and Transferred 80000 3.81 304800
Cost of Goods remaining in work in process
Number of equivalent
units transferred
Cost per equivalent
units of Direct Material
Cost of Goods
remaining in
work in process
Direct Material 30000 2 60000
Conversion 10000 1.81 18100
5) Modified Cost due to change in value of WIP stock
If the data of opening work in process changes to: the April 1 work-in-process costs were
$66,000 for direct material and $18,000 for conversion, then the cost will be as follows:

4MANAGERIAL ACCOUNTING