Question

1. Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown below.

   	Direct Materials				Conversion Costs
   Units completed		46,000				46,000
   Add: Units in ending work in process ×
   Percentage complete:
   10,000 × 100% direct materials		10,000				—
   10,000 × 40% conversion materials		—				4,000
   Eqivalent units of output		56,000				50,000
   Costs:
   Work in process, December 1:
   Direct materials						$66,000
   Conversion costs						11,000
   Total work in process						$77,000
   Current costs:
   Direct materials						$550,000
   Conversion costs						182,000
   Total current costs						$732,000

   Required:

   1. Calculate the unit cost for December, using the weighted average method. Round interim calculations to the nearest cent and, if required, round your answer to the nearest cent.
   $ per equivalent unit

   2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for. Round interim calculations to the nearest cent and, if required, round your answer to the nearest dollar.

   Cost of goods transferred out:

   Units completed	$
   Cost of EWIP
   Total costs assigned (accounted for)	$

   Reconciliation
     Cost to account for:

   BWIP	$
   Current (December)
   Total	$

   3. What if you were asked to show that the weighted average unit cost for materials is the blend of the November unit materials cost and the December unit materials cost? The November unit materials cost is $6.60 ($66,000 / 10,000), and the December unit materials cost is $11.96 ($550,000 / 46,000). The equivalent units in BWIP are 10,000, and the FIFO equivalent units are 46,000. Calculate the weighted average unit materials cost using weights defined as the proportion of total units completed from each source (BWIP output and current output). Round interim calculations to the nearest cent and, if required, round your answer to the nearest cent.
   $ per unit

Answer 1

1 & 2) Production report on weighted average method:
	Physical Units	Direct materials	Conversion Costs	Total
Units Completed	46000	46000	46000
Add:Ending WIP	10000	10000	4000
Equivalent units (A)		56000	50000
Costs and Reconciliation:
Total costs to account for:
Beg. WIP		66000	11000
Incurred during Dec.		550000	182000
Total Costs (B)		616000	193000	809000
Average cost of Equivalent unit (B/A)		11	3.86
Cost accounted for:
Cost of Units completed		506000	177560	683560
Cost of Ending WIP		110000	15440	125440
Total costs assigned and accounted for				809000
3) Weighted average unit material cost:
	Cost per unit	Weight	Total costs
Opening WIP	6.6	10000	66000
Incurred during December	11.96	46000	550160
Totals		56000	616160
Average costs (Total costs/Weight), $	11.00