Question

4) Anders Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month. Work in process, beginning Units in process Percent complete with respect to materials Percent complete with respect to conversion Costs in the beginning inventory Materials cost Conversion cost 800 70% 10% S 1,736 S 2,288 Units started into production during the month Units completed and transferred out 18,000 18,400 Costs added to production during the month Materials cost Conversion cost S 59,908 S 520,696 Work in process, ending Units in process Percent complete with respect to materials Percent complete with respect to conversion 400 70% 20% Required: a. Determine the equivalent units of production. b. Determine the costs per equivalent unit c. Determine the cost of ending work in process inventory d. Determine the cost of the units transferred to the next department

Answer 1

a) Equivalent unit of production

	Physical Unit	%	EUP-Material	%	EUP-Conversion
Unit transferred out	18400	100%	18400	100%	18400
Ending work in process unit	400	70%	280	20%	80
Equivalent unit of production			18680		18480

b) Calculate cost per equivalent unit

	Material	Conversion
Beginning WIP	1736	2288
Cost added	59908	520696
Total Cost	61644	522984
Equivalent unit	18680	18480
Cost per equivalent unit	3.3	28.3

c) Cost of ending work in process = (280*3.3+80*28.3) = $3188

d) Cost of unit transferred out = (3.3+28.3)*18400 = $581440