Question

Required information 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. $ 955 467 ped Beginning WIP inventory Direct materials Conversion costs Current period costs Direct materials Conversion costs 19,940 11.688 Quantity information is obtained from the manufacturing records and includes the following. ences Beginning inventory Current period units started Ending Inventory 500 units (658 completo as to materials, 545 complete as to conversion) 5,300 units 1,500 units (458 complete as to materials, 256 complete as to conversion) Compute the cost of goods transferred out and the ending inventory using the weighted average method. (Do not round Intermediate calculations.) Costs of goods transferred out Costs in ending inventory

Answer 1

Units transferred out = 500 + 5300 - 1500 = 4,300 units

Equivalent units as per Weighted Average Method
For Material = 4300 + (1500 x 45%) = 4,975 units
For conversion = 4300 + (1500 x 25%) = 4,675 units

Cost per equivalent units:
Material = (955+19940)/4975 = $4.2 per unit
Conversion = (467+11688)/4675 = $2.6 per unit

Cost of transferred out units = 4,300*(4.2 + 2.6)
                                                   = $29,240
Cost of ending inventory = (1500 * 45% * 4.2) + (1500 * 25% * 2.6)
                                       = (1500 * 0.45 * 4.2) + (1500 * 0.25 * 2.6)
                                       = 2835 + 975
                                       = $3810