Question

For each of the following independent cases, determine the units or equivalent units requested (assuming weighted average costing). Required: a. Beginning inventory had 12,300 units 40 percent complete with respect to conversion costs. During the period, 10,500 units were started. Ending inventory had 10,000 units 30 percent complete with respect to conversion costs. How many units were transferred out? b. Beginning inventory consisted of 16,000 units with a direct materials cost of $56,800. The equivalent work represented by all direct materials costs in the WIP Inventory account amounted to 72,000 units. Ending inventory had 24,000 units that were 20 percent complete with respect to materials. The ending inventory had an $18,000 direct materials cost assigned. What was the total materials cost incurred this period? c. The WIP Inventory account had a beginning balance of $11,400 for conversion costs on items in process and, during the period, $108,600 in conversion costs were charged to it. Also during the period, $115,200 in costs were transferred out. There were 2,400 units in the beginning inventory, and 28,800 units were transferred out during the period. How many equivalent units are in the ending inventory? d. During the period, 8,400 units were transferred into the department. The 12,800 units transferred out were charged to the next department at an amount that included $26,880 for direct materials costs. The ending inventory was 25 percent complete with respect to direct materials and had a direct materials cost of $5,040 assigned to it. How many physical units are in the ending inventory?

Answer 1

a.
Units transferred out = Beginning Inventory + Units started - Ending Inventory
= 12300 + 10500 - 10000 = 12800 units

b.
Cost per unit = $18000 / (24000 x 20%) = $3.75 per unit
Cost per unit = ($56800+Cost incurred) / Equivalent units
$3.75 = ($56800+Cost incurred) / 72000
Cost incurred = $213200

c.
Cost per unit = $115200 / 28800 = $4 per unit
Cost per unit = (Beginning Cost + Cost added) / Equivalent Units
$4 = ($11400 + $108600) / Equivalent units
Equivalent units = 30000 units

d.
Cost per unit = $26880 / 12800 = $2.10 per unit
Equivalent units = $5040 / $2.10 = 2400 units

Physical units in ending inventory = 2400 / 25% = 9600 units