Question

Saved Required information The following information applies to the questions displayed below! Victory Company uses weighted average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 790,000 units of product to finished goods. At the end of November, the work in process inventory consists of 188,000 units that are 60% complete with respect to conversion. Beginning inventory had $190,710 of direct materials and $225,700 of conversion cost. The direct material cost added in November is $1,276,290, and the conversion cost added is $4,288,300. Beginning work in process consisted of 62,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion of the units completed, 62.000 were from beginning work in process and 728,000 units were started and completed during the period. 3. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending workin process inventory. (Round "Cost per EUP" to 2 decimal places.) Cost of units transferred out EUP Cost per EUP Total cost Direct materials Conversion Total costs transferred out Costs of ending work in process EUP Total cost Cost per EUP $ 0.00 $ 0.00 $ Direct materials Conversion Total cost of ending work in process Total costs accounted for < Prev 3 of 3 2 Next >

Answer 1

Cost of goods completed & transferred EUP Total Cost Cost per EUP $1.50 $5.00 Materials Conversion Total Cost of goods completed & transferred 790,000 790,000 $1,185,000 [790000 units x $1.5] $3,950,000 [790000 units x $5] $5,135,000 Cost of ending work in process EUP Total Cost Cost per EUP $1.50 $5.00 Materials Conversion Total Cost of ending work in process 188,000 112,800 $282,000 $564,000 $846,000 [188000 units x $1.5] [112800 units x $5] Total costs accounted for $5,981,000 ($5135000 + $846000] Workings: Under weighted average method, equivalent units are to be calculated only for units completed & transferred out and units lying as ending work in process as it is assumed that the units once entered into the process become integral part of total units and no segregation between units transferred from beginning work in process and introduced during current process. Conversion cost includes Labor + Overheads. So,

Physical units of production: Units in beginning inventory Add: Units started during current period Less: Units completed and transferred out Units in ending inventory [728,000 + 188,000] 62,000 916,000 -790,000 188,000 Equivalent Units of Production (EUP) Particulars Whole Units EUP- Materials % EUP- Conversion Conversion Materials Completed and transferred Ending work in process Equivalent Units of Production (EUP) 790,000 188,000 978,000 100% 100% 790,000 188,000 978,000 100% 60% 790,000 112,800 902,800 [790000 units x 100%; 790000 units x 100%] [188000 units x 100%; 188000 units x 60%] NOTE: As the materials are added at the beginning of the process itself, it is 100% complete in the ending work in process' equivalents units calculation. Cost per equivalent units of production Cost of beginning work in process Cost added during the period Total Materials Costs & Conversion Costs Divided by Equivalent units of Production (EUP) Cost per Equivalent units of Production Materials $190,710 $1,276,290 $1,467,000 978,000 $1.50 Conversion $225,700 $4,288,300 $4,514,000 902,800 $5.00 [As computed EUP schedule presented above] [$1467000 / 978000 units = $1.5; $4514000 / 902800 units = $5]