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		31,000	units
Work-in-process inventory, August 31
Conversion: 50% complete		34,000	units
Units started		69,000
Units completed and transferred out		?
Costs
Work-in-process inventory, August 1
Material X	$	60,900
Material Y		86,100
Conversion		119,860
Costs added during August
Material X		154,500
Material Y		98,700
Conversion		228,740

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 80% 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.

Answer 1

Kindly note the question does not provide any instruction on rounding off of cost per equivalent unit. As such no rounding off is done. If rounded off, answers may differ a little.

Answer 1 & 2:

Material x Material y Conversion Equivalent Units Cost per Equivalent Unit $2.154 66,000 $2.800 83,000 $4.200

Working:

31,000 69,000 100,000 Unit Reconciliation: Units to account for: Beginning work in process Started during the month Total units to account for Total units accounted for: Units transferred to Finished goods (balancing figure) Ending work in process Total units accounted for Equivalent units of production (EUP) - weighted average method 66,000 34,000 100,000 Units Units transferred to Finished goods Ending work in process Total Units Cost per equivalent unit of production Beginning work in process Cost incurred during the month Total costs / Equivalent units of production Cost per equivalent unit of production (rounded to 2 decimals) %Material X EUP - Material X %Material y EUP - Material y % Conversion EUP - Conversion 66,000 100% 66,000 100% 66,000 100% 66,000 34,000 100%) 34,000 0% 50% 17,000 100,000 66,000 83,000 Material x Material y Conversion $60,900 $86,100 $119,860 $154,500 $98,700 $228,740 $215,400 $184,800 Costs $348,600 EUP 100,000 66,000 EUP 83,000 $2.154 $2.800 $4.200 Costs

Answer 3:

Cost of units transferred out = $604,164

Working:

Please see below in answer 4

Answer 4:

Cost of the ending Work-in-Process Inventory = $144,636

Working:

EUP 66,000 66,000 66,000 Cost per EUP $2.154 $2.800 $4.200 Total cost $142,164.00 $184,800.00 $277,200.00 $604,164.00 Total costs accounted for: Cost of units transferred out: Material X Material y Conversion Total cost transferred out Cost of ending work in process Material X Material y Conversion Total cost of ending work in process Total costs accounted for 34,000 $2.154 $2.800 $4.200 $73,236.00 $0.00 $71,400.00 17,000 $144,636.00 $748,800.00