Question

Hi-Test Company uses the weighted average method of process costing to assign production costs to its products. Information for the company's first production process September follows. Assume that all materials are added at the beginning of this production process, and that conversion costs are added uniformly throughout the process. $ 153,900 Work in process inventory, September (4,500 units, 100% complete with respect to direct materials, 70% complete with respect to conversion; consists of $54,000 of direct materials cost, $99,900 conversion cost Costs incurred in September Direct materials Conversion Work in process inventory, September 30 (9,500 units, 100% complete with respect to direct materials, 30% complete with respect to conversion) Units started in September Units completed and transferred out $450,000 $367,000 35,500 30,500 Required: Compute each of the following using the weighted average method of process costing, 1. & 2. The number of equivalent units for materials and conversion for the month 3. & 4. The cost per equivalent unit of materials and conversion for the month 5. The total cost of goods transferred out. 6. The total cost of ending work in process inventory

Answer 1

Units completed and transferred Ending WIP Tota Units Equivalent units of production Physical Units % materials EUP -Materials % conversion EUP -Conversion 30500 100% 30500 100% 30500 9500 100% 9500 30% 2850 40000 40000 33350 Costs (a) Equivalent Units (b) Equivalent cost per unit c=a/b Materials cost Conversion costs $5,04,000.00 $ 4,66,900.00 54000+450000 99900+367000 40000 33350 $ 12.60 $ 14.00 Calculate the total cost of units transferred Materials Conversion 30500 $ 30500 $ 12.60 $ 14.00 $ 3,84,300 4,27,000 Calculate the total cost of units transferred Materials Conversion 9500 $ 2850 $ 12.60 $ 14.00 $ 1,19,700 39,900