Wafer Products, Inc., produces a chemical used in the production of silicon wafers. Wafer Products uses the weighted average method for its process costing system. The Mixing department at Wafer Products began the month of June with 5,000 units (gallons) in work-in-process inventory, all of which were completed and transferred out during June. An additional 15,000 units were started during the month, 11,000 of which were completed and transferred out during June. A total of 4,000 units remained in work-in-process inventory at the end of June and were at varying levels of completion, as shown in the following.
Direct materials ……………… 60 percent complete
Direct labor….………………… 40 percent complete
Overhead……..………………. 40 percent complete
The cost information is as follows:
Costs in beginning work-in-process inventory
Direct materials ……………… $8,000
Direct labor….…………………. $3,000
Overhead……..……………….. $2,800
Costs incurred during the month
Direct materials ……………… $21,000
Direct labor….…………………. $ 8,500
Overhead……..……………….. $ 7,200
Required:
a. Prepare a production cost report for the Mixing department at Wafer Products, Inc., for the month of June.
b. Confirm that total costs to be accounted for (from step 2) equals total costs accounted for (from step 4). Note that minor differences may occur due to rounding the cost per equivalent unit in step 3.
c. According to the production cost report, what is the total cost per equivalent unit for the work performed in the Mixing department? Which of the three product cost components is the highest, and what percent of the total does this product cost represent?
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