Question

1.)

A production department's output for the most recent month consisted of 10,000 units completed and transferred to the next stage of production and 7,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

A.)8,500 units.

B.)12,000 units.

C.)17,000 units.

D.)6,500 units.

E.)13,500 units.

2.)

A company uses the weighted-average method for inventory costing. At the end of the period, 30,000 units were in the ending Work in Process inventory and are 100% complete for materials and 83% complete for conversion. The equivalent costs per unit are materials, $2.73, and conversion $2.21. Compute the cost that would be assigned to the ending Work in Process inventory for the period.

A.)$136,929.

B.)$244,500.

C.)$134,408.

D.)$216,858.

E.)$202,935.

3.)

Metaline Corp. uses the weighted average method for inventory costs and had the following information available for the year. The number of units transferred to finished goods during the year is:

  

Beginning Work in Process (30% complete, $2,200)	310 units
Ending inventory of Work in Process (70% complete)	510 units
Total units started during the year	4,300 units

A.)4,300 units.

B.)4,500 units.

C.)4,100 units.

D.)4,346 units.

E.)4,874 units.

4.)

A company's beginning Work in Process inventory consisted of 32,000 units that were 80% complete with respect to direct labor. A total of 102,000 were finished during the period and 37,000 remaining in Work in Process inventory were 50% complete with respect to direct labor at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:

A.)120,500.

B.)69,500.

C.)88,000.

D.)102,000.

E.)146,100

5.)

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is:

Direct materials used	$106,000
Direct labor used	179,000
Predetermined overhead rate (based on direct labor)	160%
Goods transferred to finished goods	451,000
Cost of goods sold	463,000
Credit sales	829,000

A.)Debit Raw Materials Inventory $106,000; credit Accounts Payable $106,000.

B.)Debit Raw Materials Inventory $106,000; credit Finished Goods Inventory $106,000.

C.)Debit Cost of Goods Sold $106,000; credit Finished Goods Inventory $106,000.

D.)Debit Work in Process Inventory $106,000; credit Raw Materials Inventory $106,000.

E.)Debit Work in Process Inventory $106,000; credit Cost of Goods Sold $106,000.

Answer 1

Concepts and reason

Ending work in process: Ending work in process represents the goods which are still not completed and are in process of completion at year end. The cost of ending work in process is calculated by multiplying the units in ending work in process by the cost per equivalent unit.

Finished goods inventory: Units which are completed and transferred are the units which have been prepared as finished goods and so they are transferred to finished goods inventory. The cost of these units is calculated by multiplying the units completed and transferred out by the cost per equivalent unit.

Fundamentals

Equivalent units: Equivalent units are the units which are shown as fully completed units for units which have been completed fully and for the one which are completed partially. It represents the work in process inventory. The cost of per equivalent unit is calculated by using the weighted average method. The cost per unit is calculated by adding the beginning work in process inventory and the cost incurred during the current year and dividing them with equivalent units.

(1)

Calculation of equivalent units of production.

$\begin{array}{c}\\{\rm{Equivalent units of production = Units completed + Ending work in process inventory}}\\\\{\rm{ = 10,000 + (7,000}} \times {\rm{50\% )}}\\\\{\rm{ = 10,000 + 3,500}}\\\\{\rm{ = 13,500 units}}\\\end{array}$

Thus, equivalent units of production for the month is 13,500 units.

(2)

Calculation of cost assigned to ending work in process inventory.

Thus, cost assigned to ending work in process inventory is $136,929.

(3)

Calculation of number of units transferred to finished goods.

$\begin{array}{c}\\{\rm{Units transferred = Beginning work in process + Units started - Ending work in process}}\\\\{\rm{ = 310 + 4,300 - 510}}\\\\{\rm{ = 4,100}}\\\end{array}$

Thus, number of units transferred to finished goods is 4,100 units.

Ans: Part 1

The equivalent units of production for the month is 13,500 units.

Part 2

The cost assigned to ending work in process inventory is $136,929.

Part 3

The number of units transferred to finished goods during the year is 4,100 units.