Question

Required Information Exercise 8-33 & 8-34 (Algo) (LO 8-2, 3) [The following information applies to the questions displayed below) The Matsui Lubricants plant uses the weighted average method to account for its work-in-process Inventories. The accounting records show the following Information for a particular day. 1985 522 Beginning WIP Inventory Direct materials Conversion costs Current period costs Direct materials Conversion costs 28,66e 17,809 Quantity Information is obtained from the manufacturing records and includes the following Beginning Inventory Current period units started Ending Inventory 850 units (70% complete as to materials. 54% complete as to conversion) 6.000 units 1.600 units 50% complete as to materials 20% complete as to conversion Exercise 8-34 (Algo) Assign Costs to Goods Transferred Out and Ending Inventory: Weighted Average Method (LO 8-2, 3) Compute the cost of goods transferred out and the ending inventory using the weighted average method (Do not found intermedia calculations.) Con of stered out CON ning vertory

Answer 1

Units transferred out = 850 + 6000 - 1600 = 5250 units

Equivalent units as per Weighted Average Method
For Material = 5250 + (1600 x 50%) = 6050 units
For conversion = 5250 + (1600 x 20%) = 5570 units

Cost per equivalent units:
Material = (985+28660)/6050 = $4.90 per unit
Conversion = (572+17809)/5570 = $3.3 per unit

Cost of transferred out units = 5250*(4.9+3.3) = $43050
Cost of ending inventory = (1600*0.5*4.9) + (1600*0.20*3.3) = $4976