Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,700 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $610,602 in total. The ending work in process inventory in January consisted of 3,100 units, which were 40% complete with respect to materials and 20% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Materials Labor Overhead Cost per equivalent unit $ 12.70 $ 3.70 $ 6.50 Required:

1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month

. 2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.

3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.

4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Answer 1

Solution 1:

Equivalent units of production (EUP) in the Ending work in process - Weighted Average method
	Units	%Material	EUP-Material	% Labor	EUP- Labor	% Overhead	EUP- Overhead
units of Ending work in process	3100	40%	1240	20%	620	20%	620

Solution 2:

Computation of Ending Work in process inventory
	Materials	Labor	Overhead	Total for January
Equivalent units	1240	620	620
Cost per equivalent unit	$12.70	$3.70	$6.50
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$15,748	$2,294	$4,030	$22,072

Solution 3:

Computation of Cost of the units transferred
	Materials	Labor	Overhead	Total for January
Equivalent units (25700*100%)	25700	25700	25700
Cost per equivalent unit	$12.70	$3.70	$6.50
Cost of Units transferred (Equivalent units* Cost per equivalent unit)	$3,26,390	$95,090	$1,67,050	$5,88,530

Solution 4:

Cost Reconciliation Report
Particulars	Amount
Costs to be accounted for	$6,10,602
Costs accounted for as follows:
Cost of unit transferred out	$5,88,530
Cost of Ending Work in process inventory	$22,072
Total cost accounted for	$6,10,602

Answer 2

Can I take average of total cost of beginning work in process and cost added instead of direct putting total amount?