Question

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.

Beginning WIP inventory
Direct materials	$	976
Conversion costs		272
Current period costs
Direct materials		11,440
Conversion costs		6,644

Quantity information is obtained from the manufacturing records and includes the following.

Beginning inventory	600	units	(60% complete as to materials, 53% complete as to conversion)
Current period units started	4,000	units
Ending inventory	1,200	units	(40% complete as to materials, 20% complete as to conversion)

a. Compute the equivalent units for the materials and conversion cost calculations.

b. Compute the cost per equivalent unit for direct materials and conversion costs.

c. compute the cost of goods transferred out and the ending inventory using the weighted-average methodc

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer 2 Part 1) 3 Statement of Equivalent Units Physical Units % Completion Direct Material % Completion | Conversion Cost 100 100 3400 4 Particulars Units completed and transferred Out 5 (600+4000-1200) 6 Units in ending inventory 7 Equivalent Units 8 9 Thus the correct answer 3400 1200 4600 3400 480 3880 240 3640 Direct Material 3880 Conversion Cost 3640 11 Equivalent Units 12 14 15 13 Part 2) Statement of cost Per Equivalent Units Direct Material Conversion Cost 16 Cost in Beginning Inventory 976 272 17 Cost incurred during the period 11440 6644 18 Total Cost 12416 6916 19 No. of equivalent Units 3880 20 Cost per equivalent Uints 3640 1.9 21 22 Thus the correct answer 23 24 Cost per equivalent Uints Direct Material 3.2 Conversion Cost 1.9 1shoot 15 cbontorchonto choot11 Shoot16 Shoot17 shot10

26 Part 3) 28 Cost of goods transferred out = No. of units* total equivalent unit cost 29 = 3400*(3.2+1.9) 30 = $ 17340 32 Cost of ending inventory = (480*3.2)+(240*1.9) 33 = $ 1992 35 Thus the final answer 36 Cost of goods transferred out 37 Cost of ending inventory 17,340 1,992