Question

Timekeeper Inc. manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Timekeeper Inc. uses weighted - average costing. Data for the Assembly Department for June 2017 are: Work in process, beginning inventory 340 units Direct materials (100% complete) Conversion costs (45% complete) Units started during June 960 units Work in process, ending inventory: 170 units Direct materials (100% complete) Conversion costs (80% complete) Costs for June 2017:

Answer 1

Equivalent units for Material Equivalent Unit Material 1130 Units to be accounted for:- Units Completed & transferred out Ending work in Process Total Units 170 1300 Units completed & transferred = Beginning inventory +Units started - Ending inventory = 340 +960 - 170 = 1130 units Units completed and transferred and Units in ending Inv are 100% complete in regards of material. So 170 x 100% = 170 Cost Per Equivalent Unit Material Cost To be accounted For:- Beginning work in process Cost added during month Total Cost $ $ 90,500 604,000 694,500 (A) Equivalent Units Cost per Equivalent unit (A)/(B) $ 1300 534 Rounded off Ending Work in process Material (170 units x $534 per unit) $ 90,780.00 Option B We have calculated total equivalne units of material and total cost of material. By dividing total cost by equivalent units we get cost per equivalent unit. Multiply cost per equivalent unit with units in ending inventory to calculate material cost added in ending inv.