Question

PROBLEM 6–11 Equivalent Units; Assigning Costs-Weighted-Average Method [LO2, LO3, LO4, LO5] The WireOne Company manufactures high-quality coated electrical wire in two departments, Weaving and Coating. Materials are introduced at various points during work in the Weaving Department. After the weaving is completed, the materials are transferred into the Coating Department, where specialty plastic coating is applied. Selected data relating to the Weaving Department during May are given below: Production data: Kilograms in process, May 1 (materials 100% complete; conversion 80% complete)... Kilograms started into production during May.. Kilograms completed and transferred to Coating. Kilograms in process, May 31 (materials 65% complete; conversion 30% complete) Cost data: 85,000 365,000 55,000 Work in process inventory, May 1: Materials cost . $101,000 $ 51,000 Conversion cost. Cost added during May: Materials cost $462,000 $213,000 Conversion cost. The company uses the weighted-average method. Required: 1. Compute the equivalent units of production. 2. Compute the costs per equivalent unit for May. Determine the cost of ending work in process inventory and of the units transferred to the Coating Department. Prepare a cost reconciliation between the costs determined in (3) above and the cost of beginning 3. 4. inventory and costs added during the period.

Answer 1

Solutions:

H. Equivalent units of production (EUP) - Weighted Average method % material EUP-Materials% ConversionEUP- Conversion 6 Units Units Completed and transferred out 395000 (85000+365000-55000) units of Ending work in process Equivalent units of production 395000 100% 395000 100% 55000 35750 16500 65% 30% 411500 430750 10 Cost per Equivalent unit: Cost of Beginning Work in Process Cost added Total Costs 11 Material Conversion $51,000 $213,000 $264,000 $101,000 $462,000 $563,000 12 13 14 /Equivalent units of Production Cost per Equivalent unit of Production 411500 $0.64156 15 430750 $1.30702 16 17 Cost Assignment and reconciliation Cost of Units Transferred Out Material Conversion Cost per EUP $1.30702 $0.64156 18 Total Cost EUP $516,274 $253,414 $769,688 395000 19 20 395000 Total transferred out 21 22 Cost of ending work in process Material Cost per EUP $1.30702 $0.64156 Total Cost 23 EUP $46,726 24 35750 Conversion 16500 25 $57,312 Total Ending work in process 26 27 28 29 30 31 32 Cost Reconciliation Report 33 34 Particulars Amount costs to be accounted for: 35 Cost of beginning WIP inventory Cost added to production $152,000 $675,000 36 37 38 Total Cost to be accounted for Costs accounted for as follows: Cost of unit transferred out Cost of Ending WIP $827,000 39 40 $769,688 41 $57,312 42 43 $827,000 Total cost accounted for 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 Sheet578 (4) Sheet578 (6) Sheet578 (5) -8) Sheet578 Shee