Question

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		800
Percent complete with respect to materials		70	%
Percent complete with respect to conversion		10	%
Costs in the beginning inventory:
Materials cost	$	1,736
Conversion cost	$	2,288
Units started into production during the month		18,000
Units completed and transferred out		18,400
Costs added to production during the month:
Materials cost	$	59,908
Conversion cost	$	520,696
Work in process, ending:
Units in process		400
Percent complete with respect to materials		70	%
Percent complete with respect to conversion		20	%

Required:

1. 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)

	Materials	Conversion
Units transferred to next department	18,000	18,400
Ending work in process:
Materials: 400 units × 70%	280
Conversion: 400 units × 20%		80
Equivalent unis of production	18,280	18,480

b)

	Materials	Conversion
Cost of beginning work in process	$1,736	$2,288
Cost added during the month	$59,908	$520,696
Total cost (a)	$61,644	$522,984
Equivalent units(b)	18,280	18,480
Cost per equivalent unit (a ÷ b)	$3.37	$28.3

c)

	Materials	Conversion	Total
Ending work in process
Equivalent units of production	280	80
Cost per equivalent units	$3.37	$28.3
Cost of ending work in process inventory	$943.6	$2,264	$3,207.6

d)

	Materials	conversion	Total
Units completed and transfered out	18,000	18,400
Cost per equivalent unit	$3.37	$28.3
Cost of unit transfered out	$60,660	$520,720	$581,380