Question

4. Wyman Corporation. has the following information for May:

Beginning Work in Process Inventory (75% complete as to conversion)	7,500 units
Started	27,000 units
Ending Work in Process Inventory (15% complete as to conversion)	9,400 units
Beginning WIP Inventory Costs:
Material	$25,500
Conversion	52,725
Current Period Costs:
Material	$34,300
Conversion	80,845

Note: all material is added at the start of the process and all finished products are transferred out.

1).    How many units were transferred out in May?

2)     What is the equivalent unit for direct materials and conversion, respectively?

3).     Assume that weighted average process costing is used. What is the cost per equivalent unit for material? And what is the cost per equivalent unit for conversion?

Answer 1

1.

Units transferred out = 7,500+27,000-9,400 = 25,100 units

2.

		Equivalent unit
		Material	Conversion
Units transferred out	25,100	25,100	25,100
Units in ending work in process	9,400	9,400	1,410(9,400*15%)
Total units	34,500	34,500	26,510

3.

	Material	Conversion
Cost in beginning work in process	$25,500	$52,725
Current period costs	34,300	80,845
Total costs	59,800	133,570
Total equivalent units	34,500	26,510
Cost per equivalent unit	$1.733	$5.038