Question

Equivalent Units and Product Cost Report-Weighted Average Method The following data (and annotations) are for the work in process account of the first of Crocker Company's four departments used in manufacturing its only product for October of 2016. Work in Process-Department 1 Beginning balance (2,000 units, 70% complete) Direct material $12,400 Conversion costs 4,800 Transferred to department 2 (20,000 units) Direct material (21,000 units) Direct labor 72,600 Manufacturing overhead 24,150 Ending balance [(b) units, 25% complete] (c) (a) 126,000 Assuming that Crocker uses the weighted average method and that materials are added at the beginning of the process and conversion costs are incurred evenly throughout, solve for the three missing numbers. Round average cost per equivalent unit to four decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number. Crocker Company Department 1 Equivalent Units Calculations, October 2016 Equivalent Units % Work Direct % Work done Materials Done Complete/Transferred 100% 100% Ending Inventory b. 100% 25 % Total Conversion Costs Product Cost Report Direct Materials Conversion Costs $ $ $ $ $ $ $ $ $ Beginning Inventory Current Total Costs to Account For - Total Equivalent Units Average cost / Equivalent unit (round four decimal places) Complete / Transferred: Direct Materials Conversion costs Cost of Goods Manufactured Ending Inventory: Direct Materials Conversion costs Cost of Ending Inventory Total Costs Allocated $ a. $ C. $ $ —

Answer 1

Under weighted average method, equivalent units are to be calculated only for units completed & transferred out and units lying as ending work in process as it is assumed that the units once entered into the process become integral part of total units and no segregation between units transferred from beginning work in process and introduced during current process. Conversion cost includes Labor + Overheads. So, % of completion of beginning Work in Process Inventory doesn't affect the calculation of equivalent units of production. Physical Units of production: Units in beginning inventory 2,000 Add: Units started during current period 21,000 Less: Units completed and transferred out -20,000 b) Units in ending inventory 3,000 Particulars EUP- Materials Completed and transferred Ending work in process Equivalent Units of Production (EUP) Physical % work done Units Materials 20,000 100% 3,000 100% 23,000 20,000 3,000 23,000 % work done EUP- Conversion Conversion 100% 20,000 [20000 units x 100%; 20000 units x 100%] 25% 750 [3000 units x 100%; 3000 units x 25%] 20,750 Product Cost Report

Cost per equivalent units of production Cost of beginning work in process Cost added during the period Total Costs to Account For Divided by Equivalent units of Production (EUP) Average Cost/Equivalent Unit Materials $12,400 $126,000 $138,400 23,000 $6.0174 Conversion $4,800 $96,750 [Conversion = Labor + Overhead = $72600 + $24150 = $96750] $101,550 20,750 [As computed EUP schedule presented above] $4.8940 ($138400 / 23000 units = $6.0174; $101550 / 20750 units = $4.894] Cost per Cost of goods completed & transferred EUP Totals Materials Conversion Total Cost of goods completed & transferred 20,000 20,000 EUP $6.0174 $4.8940 $120,348 [20000 units x $6.0174] $97,880 [20000 units x $4.8940] $218,228 Cost of ending work in process EUP Totals Cost per EUP $6.0174 $4.8940 Materials Conversion Total Cost of ending work in process 3,000 750 $18,052 [3000 units x $6.0174] $3,671 [750 units x $4.8940] $21,723 Total Costs Accounted For $239,951 ($218228 + $21723]