Question

1. Weighted Average Method, Unit Cost, Valuation of Goods Transferred Out and Ending Work in Process

   Holmes Products, Inc., produces plastic cases used for video cameras. The product passes through three departments. For April, the following equivalent units schedule was prepared for the first department:

   		Direct Materials				Conversion Costs
   Units completed			25,000				25,000
   Units, ending work in process ×   Percentage complete:
   8,000 × 100%			8,000				—
   8,000 × 50%			—				4,000
   Equivalent units of output			33,000				29,000

   Costs assigned to beginning work in process: direct materials, $90,000; conversion costs, $29,250. Manufacturing costs incurred during April: direct materials, $75,000; conversion costs, $210,000. Holmes uses the weighted average method.

   Required:

   1. Compute the unit cost for April. If required, round your answer to the nearest cent.
   $ per equivalent unit

   2. Determine the cost of ending work in process and the cost of goods transferred out.

   Cost of ending work in process	$
   Cost of goods transferred out

Answer 1

Answer 1

$ 13.25 per equivalent unit

Answer 2

Cost of ending work in process = $ 73,000

Cost of goods transferred out = $ 331,250

Note:

Statement of Equivalent Production
Particulars		Material		Conversion cost
			Units		Units
Put and processed			25,000		25,000
Closing stock			8,000		4,000
Total			33,000		29,000
Costs:
Opening		$              90,000		$              29,250
April		$              75,000		$           210,000
Total		$           165,000		$           239,250
Cost per unit		$                  5.00		$                  8.25

Value of Put and processed
Material	$      125,000
Conversion cost	$      206,250
Total	$      331,250
Value of Closing Stock
Material	$         40,000
Conversion cost	$         33,000
Total	$         73,000

In case of any doubt, please comment.