Question

Arsenio Company manufactures a single product that goes through two processes, mixing and cooking. The following data pertain to the mixing department for August:

Work-in-process inventory, August 1
Conversion: 70% complete		37,000	units
Work-in-process inventory, August 31
Conversion: 50% complete		36,000	units
Units started		63,000
Units completed and transferred out		?
Costs
Work-in-process inventory, August 1
Material X	$	58,100
Material Y		84,000
Conversion		118,120
Costs added during August
Material X		151,500
Material Y		146,400
Conversion		177,080

Material X is added at the beginning of work in the mixing department. Material Y is also added in the mixing department, but not until units are 60% complete with regard to conversion. Conversion costs are incurred uniformly during the process. The company uses the weighted-average cost method.

Required:

1. & 2. Calculate the equivalent units and costs per equivalent unit of material X, material Y, and conversion for the mixing department.

3. Calculate the cost of units transferred out.

4. Calculate the cost of the ending Work-in-Process Inventory.

Req 1 and 2 Reg 3 Reg 4 Calculate the equivalent units and costs per equivalent unit of material X, material y, and conversion for the mixing department. (Round "Cost per Equivalent Unit" answers to 2 decimal places.) Material X Material Y Conversion Equivalent Units Cost per Equivalent Unit Req 1 and 2 Req3 > Req 1 and 2 Reg 3 Reg 4 Calculate the cost of units transferred out. (Do not round intermediate calculations.) Cost of Units Transferred Out < Req 1 and 2 Req 4 > Req 1 and 2 Reg 3 Reg 4 Calculate the cost of the ending Work-in-Process Inventory. (Do not round intermediate calculations.) Cost of Ending Work-in-Process < Reg 3 Reg 4 >

Answer 1

Solution

	Material X	Material Y	Conversion
Equivalent Units of Production	100,000	64,000	82,000
Cost per equivalent Unit	$                    2.10	$              3.60	$                     3.60

.

Cost of units Transferred out

$       594,944.00

.

Cost of Ending Work in process inventory

$       140,256.00

Working

Reconciliation of Units
A	Opening WIP	37,000
B	Introduced	63,000
C=A+B	TOTAL	100,000
D	Transferred	64,000
E=C-D	Closing WIP	36,000

.

Statement of Equivalent Units(Weighted average)
		Material X		Material Y		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	64,000	100%	64,000	100%	64,000.0	100%	64,000
Closing WIP	36,000	100%	36,000	0%	-	50%	18,000.00
Total	100,000		100,000	Total	64,000.0	Total	82,000

.

Cost per Equivalent Units (Weighted average)
COST	Material X	Material Y	Conversion cost	TOTAL
Beginning WIP Inventory Cost	$          58,100.00	$ 84,000	$ 118,120	$ 260,220
Cost incurred during period	$       151,500.00	$ 146,400	$ 177,080	$ 474,980
Total Cost to be accounted for	$ 209,600	$ 230,400	$ 295,200	$ 735,200
Total Equivalent Units	100,000.0	64,000.0	82,000.0
Cost per Equivalent Units	$                  2.096	$            3.600	$                   3.600

.

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material X	$                    2.10	36,000	$          75,456.00	64,000	$ 134,144
Material Y	$ 3.60	-	$                          -	64,000	$ 230,400
Conversion cost	$ 3.60	18,000	$          64,800.00	64,000	$ 230,400
TOTAL	$ 735,200	TOTAL	$ 140,256	TOTAL	$ 594,944