The following partially completed process cost summary describes the July production activities of Ashad Company. Its production output is sent to its warehouse for shipping. All direct materials are added to products when processing begins. Beginning goods in process inventory is 20% complete with respect to direct labor and overhead.

Equivalent units of production Direct Materials Direct Labor Factory Overhead
Units transferred out 122,000 122,000 122,000
Units of ending goods in process 19,000 13,300 13,300
Equivalent units of production 141,000 135,300 135,300
Costs Direct Materials Direct Labor Factory Overhead
Costs of beginning goods in process $38,600 $1,480 $2,960
Costs incurred this period 751,000 133,820 267,640
Total costs $789,600 $135,300 $270,600
U
nits in beginning goods in process (all completed during July): 8,000

Units started this period: 133,000

Units completed and transferred out: 122,000

Units in ending goods in process: 19,000

*Prepare its process cost summary using the weighted-average method.

Explanation:

We solve this prblem in three steps    

Step#1    

In this step we will prepare the summary of units produces and trasffered and units in closing stock    

Opening units  8000  

Started                133000  

                           141000  

Transffered          122000  

Closing                      19000  

Step#2

We will prepare production and cost table, total cost will be divided by the total units produced to identify the cost per unit  incurred on material, labor and overheads.

Cost      opening   Current    Total      Complete  Closing  Equiv.      Cost

Head       Cost        Cost        Cost          units          WIP      Units     Per unit

Material  38,600  751,000   789,600   122,000    19,000  141,000  5.6000  

Labor     1,480      138,820    140,300   122,000    13,300 135,300  1.0370  

O.H       2,960      267,640   270,600  122,000    13,300  135,300  2.0000  

Step-3      

In this process we will calculate the cost incurred during the period.      

Complete  122,000   8.64   1,053,708  

Closing Wip    

Material    19,000   5.60            106,400  

Labor              13,300   1.04            13,792  

Overheads  13,300   2.00            26,600  

                                            146,792  

Total Cost                             1,200,500  

statement of owner's equity;