Question

2 Required information [The following information applies to the questions displayed below.) Victory Company uses weighted average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the first process. During November, the first process transferred 805,000 units of product to the second process. Additional information for the first process follows. t 2 of 3 - ats At the end of November, work in process inventory consists of 193,000 units that are 70% complete with respect to conversion. Beginning work in process inventory had $194,610 of direct materials and $188,020 of conversion cost. The direct material cost added November is $1,302,390, and the conversion cost added is $3,572,380. Beginning work in process consisted of 79,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 79,000 were from beginning work in process and 726,000 units were started and completed during the period. eBook Ask eferences 2. Compute both the direct material cost and the conversion cost per equivalent unit. Cost per equivalent unit of production Materials Conversion Total costs Costs Costs EUP EUP + Equivalent units of production Cost per equivalent unit of production (rounded to 2 decimals)

Answer 1

1)

	Physical units	Material	conversion
Completed and transferred out	79000+726000=805000	805000	805000
Ending WIP	193000	193000*100%=193000	193000*70%=135100
eQUIVALENT UNIT	998000	998000	940100

2)

		Material		Conversion
Beginning work in process		194610		188020
Current period production		1302390		3572380
Total cost	cost	1497000	cost	3760400
/ Equivalent units of production	EUP	998000	EUP	940100
cost per equivalent unit of production		1.50		4

3)

cost of units transferred out	EUP	Cost per EUP	Total cost
Direct material	805000	1.50	1207500
conversion	805000	4	3220000
Total cost of units transferred out				4427500
cost of ending work in process
Direct material	193000	1.50	289500
conversion	135100	4	540400
Total cost of ending work in process				829900
Total cost accounted for				5257400