Question

KI Paragraph Styles 2 5. 2. Mickey Mouse Company had zero units in its Work in Process Inventory. During the period it completed and transferred out 25,000 units and there were 5,000 units left in work in process inventory. The ending work in process were 100 % complete in materials and 40% complete as to conversion cost. Required: i. How many units were in production during the period? ii. Compute equivalent units for Materials and Conversion Cost under the Weighted Average Method iii. If total Materials Costs is $90,000 and total Conversion cost is $142,000 at the end of the period. Compute: a. The Cost of Goods completed and transferred out. b. The total cost of Ending Work in Process Inventory

Answer 1

2.
i. Units in the production = 25000 + 5000 = 30000 units

ii.

	Physical units	Material	Conversion
Units to account for
Work in Process Beginning	0
Started during the period	30000
Total units to account for	30000
Units Accounted for
Completed and transferred	25000	25000	25000
Work in Process Ending	5000	5000	2000
Total Units Accounted for	30000
Equivalent units		30000	27000

iii.

	Material	Conversion	Total
Cost of Beginning Work in Process	$                 -	$                 -	$                 -
Cost added during the period	$        90,000	$      142,000	$      232,000
Total Cost to account for	$        90,000	$     142,000	$     232,000
Equivalent units of Production	30000	27000
Cost per Equivalent unit	$            3.00	$            5.26	$            8.26
	Material	Conversion	Total
Units Completed and transferred out
Units transferred to next department	25000	25000
Cost per equivalent unit	$            3.00	$            5.26
Cost of units transferred out	$        75,000	$     131,500	$     206,500
	Material	Conversion	Total
Ending work in Process Inventory
Equivalent units of Production	5000	2000
Cost per equivalent unit	$            3.00	$            5.26
Cost of Ending work in Process Inventory	$        15,000	$        10,520	$        25,520
Total Costs Accounted for	$        90,000	$     142,020	$     232,020

Difference of $20 is on account of rounding off, alternatively ending work in process can be written as $25,500

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