Tamar Co. manufactures a single product in two departments. All direct materials are added at the beginning of the Forming process. Conversion costs are added evenly throughout the process. During May, the Forming department started 21,600 units, and transferred 22,200 units of product to the Assembly department. Its 3,000 units of beginning work in process consisted of $19,800 of direct materials and $221,940 of conversion costs. It has 2,400 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $496,800 of direct material costs and $2,165,940 of conversion costs were charged to production. Required:
Prepare the company's process cost summary for May using the weighted-average method.

Tamar Co.

Process Cost Summary for May, using the weighted-average method:

Process Cost Summary for May:

                                     Materials      Conversion       Total

Units transferred    $466,200         $2,197,800       $2,664,000

Ending WIP                  50,400              190,080             240,480

Total cost                $516,600         $2,387,880       $2,904,480

Explanation:

a) Data and Calculations:

Units started = 21,600

Units transferred = 22,200

Beginning work in process = 3,000 units

Cost of beginning work in process:

Direct materials $19,800

Conversion costs = $221,940

Ending work in process = 2,400 units

Degree of completion:

Materials = 100%

Conversion = 80%

Actual costs incurred:

Direct materials = $496,800

Conversion = $2,165,940

Calculation of Equivalent Units:

                                  Materials                   Conversion

Units transferred out  22,200  (100%)         22,200  (100%)

Ending WIP                    2,400  (100%)             1,920  (80%)

Total equivalent unit  24,600                        24,120

Cost of production:

                                     Materials        Conversion       Total

Beginning WIP                $19,800         $221,940        $241,740

Current period              496,800         2,165,940      2,662,740

Total production cost  $516,600      $2,387,880    $2,904,480

Cost per equivalent unit:

                                     Materials        Conversion       Total

Total production cost $516,600       $2,387,880    $2,904,480

Total equivalent unit      24,600               24,120

Cost per equivalent unit $21                $99

Process Cost Summary for May:

                                     Materials      Conversion       Total

Units transferred    $466,200         $2,197,800       $2,664,000

                              ($21 *22,200)    ($99 * 22,200)

Ending WIP                 50,400               190,080            240,480

                              ($21 *2,400)    ($99 * 1,920)

Total cost               $516,600          $2,387,880       $2,904,480

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