Question

Tambin Inc. produces a gasoline additive that, when added to the gas tank of the average automobile, is designed to increase gas mileage by 15%. The company's controller suspects that the year-end dollar balances shown below in the inventory accounts may be incorrect. Units Costs Work in process, December 31 (materials 100% complete; conversion 60% complete) Finished goods, December 31 36,000 41,000 $ 71,000 $124,500 There were no finished goods inventories at the beginning of the year. The company uses the weighted average method of process costing. There is only one processing department. A review of the company's inventory and cost records shows the following: Costs Units Materials Conversion 31,000 611,000 $ 33,000 $ Work in process, beginning of year (materials 100% complete; conversion 50% complete) Started into production Costs added during the year Units completed during the year 59,000 $ 761,000 $2,110,000 790,000 Required: 1. Determine the equivalent units and the costs per equivalent unit for materials and conversion for the year. (Round your "Cost per equivalent unit" answers to 2 decimal places.) Materials Conversion Equivalent units of production Cost per equivalent unit

Answer 1

			Material $	Conversion$	Cost $
		Unit
	Work in progress ( Opening of the year)	31,000	33,000	59,000
	Started into Production	6,11,000	7,61,000	21,10,000
	Units completed durig the year	7,90,000
	Work in Progress as ob 31st Dec	36,000		71,000
	( 100% material competed
	( 50% conversion competed
	Finished goods at end of they year	41,000		1,24,000
	need to calculate Equivalent Unit of Production ( Average cost methid)			Unit- output	Equivalent Unit
		Input - Unit	Output - Unit			Materail		Conversion
	Work in progress ( Opening of the year)	31,000	Completed and Transferred	7,90,000	100%	7,90,000	100%	7,90,000
	Started into Production	6,11,000	Work in Progress as on 31st Dec	36,000	100%	36,000	50%	18,000	(50%*$36000)
		6,42,000		8,26,000		8,26,000		8,08,000
	Derive cost as per above data	Material $	Conversion$	Total Cost $
	Work in progress ( Opening of the year)	33,000	59,000	92,000
	Started into Production	7,61,000	21,10,000	28,71,000
	Total cost	7,94,000	21,69,000	29,63,000
	Equivalent unit ( as above)	8,26,000	8,08,000	16,34,000
	Cost / Equivalnet unit	0.96	2.68	1.81
	Work in Progress as ob 31st Dec - cost to derived	Unit		material	Conversion	material $	Conversion $
		36,000	Cost per Unit ($/ unit)	0.96	2.68	34,605	96,639
						( 36000 Unit @$0.96/ Unit )	( 36000 Unit @$2.68/ Unit )
	Finished goods at end of they year	41,000	Cost per Unit ($/ unit)	0.96	2.68	39,412	1,10,061
						( 41000 Unit @$0.96/ Unit )	( 41000 Unit @$2.68/ Unit )
	On the above calculation , we can update below asnwer
1	Equivalent unit of production	material	Conversion
	Calculation as above	8,26,000	8,08,000
	Cost per Equivalent Unit ( as calculated above)	0.96	2.68
2	Cost complete details	material $	Conversion $
	Work in Progress as ob 31st Dec	34,605	96,639
	Finished goods at end of they year	39,412	1,10,061
	( calculation as above)
	Total cost	74,017	2,06,699