Question

Equivalent Units and Product Cost Report—Weighted Average Method

In its first month's operations (January 2016,, Allred Company's Department 1 incurred charges of $360,000 for direct materials (15,000 units), $99,000 for direct labor, and $174,000 for manufacturing overhead. At month- end, 13,200 units had been finished and transferred out. The remaining units were finished with respect to material but only 25% complete with respect to conversion costs.

Assuming Allred uses the weighted average method and that materials are added at the beginning of the process and conversion costs occur evenly, compute the following:

1. The equivalent units of materials and conversion costs.

2. The cost per equivalent unit of materials and conversion costs.

3. The total cost assigned to the units transferred out.

4. The total cost assigned to the ending inventory.

5. Prove that your solutions to requirements (c) and (d) sum to the total costs to be accounted for.

Round average cost per equivalent unit to two decimal places, if applicable.

Round other answers to the nearest whole number, when appropriate.

Allred Company Department 1 Flow of Units and Equivalent Units Calculation
		Equivalent Units
		% Work done	Direct Materials	% Work Done	Conversion Costs
Complete/Transferred	Answer	Answer%	Answer	Answer%	Answer
Ending Inventory	Answer	Answer%	Answer	Answer%	Answer
Total	Answer	a.	Answer		Answer	a.

Product Cost Report
			Direct Materials		Conversion Costs
Beginning Inventory	$Answer		$Answer		$Answer
Current	Answer		Answer		Answer
Total Costs to Account For	$Answer		$Answer		$Answer
÷ Total Equivalent Units			Answer		Answer
Average cost / Equivalent unit			$Answer	b.	$Answer	b.
Complete / Transferred:
Direct Materials	$Answer
Conversion costs	Answer
Cost of Goods Manufactured	$Answer	c.
Ending Inventory:
Direct Materials	$Answer
Conversion costs	Answer
Cost of Ending Inventory	$Answer	d.
Total Costs Allocated	$Answer	e.

Answer 1