Question

Vista Vacuum Company has the following production information for the month of March. All materials are added at the beginning of the manufacturing process. Units Beginning inventory of 3,500 units that are 100 percent complete for materials and 28 percent complete for conversion • 15,300 units started during the period. Ending inventory of 3,700 units that are 18 percent complete for conversion Manufacturing Costs Beginning inventory was $19,600 ($9,000 materials and $10,600 conversion costs). • Costs added during the month were $30,100 for materials and $54,800 for conversion ($28,100 labor and $26,700 applied overhead) Assume the company uses Weighted Average Method Required: 1. Calculate the number of equivalent units of production for materials and conversion for March 2. Calculate the cost per equivalent unit for materials and conversion for March 3. Determine the costs to be assigned to the units transferred out and the units still in process

Answer 1

1 Equivalent Unit Conversion cost Physical units Material 15100 Units to be accounted for:- Units Completed Ending Units Total Equivalent Units 15100 3700 18800 151001 3700 18800 666 15766 Units Completed = Beginning Units +Units started - Ending units = 3500 + 15300 - 3700 = 15100 As units are completed and transferred out, these units are 100% complete in regards of all costs. Ending work in Process = Ending units X Percentage complete 3700 x 100% = 3700 3700 x 18% = 666 2 Cost Per Equivalent Unit Material Conversion Total cost Cost To be accounted For:- Beginning work in process Cost added during month Total Cost (A) $ $ $ 9,000 $ 30,100 $ 39,100 $ 10,600 $ 54,800 $ 65,400 $ 19,600 84,900 104,500 15766 Equivalent Units Cost per unit (B) (A)/(B) 18800 2.07979 $ $ 4.14817 3 Cost assigned Units Completed Ending Inventory Total Cost Accounted for Material $ $ 31,405 7,695 39,100 Conversion $ $ Total cost 62,637 $ 2,763 $ 65,400 $ 94,042 10,458 104,500 $ $ Working Units Completed Ending Inventory Material 15100 x $ 2.07979 3700 x $ 2.07979 Conversion 15100 x $ 4.14817 666 x $ 4.14817