Weighted-Average Method Sosna Company has a department that manufactures wood trusses (wood frames used in the construction industry). The following information is for the production of these trusses for the month of February:
Work-in-process inventory, February 1 | 5,000 trusses |
Direct materials cost: 100 percent complete | $100,000 |
Conversion: 20 percent complete | $135,000 |
Units started during February | 12,000 trusses |
Units completed during February and transferred out | 13,000 trusses |
Work-in-process inventory, February 29 |
|
Direct materials: 100 percent complete |
|
Conversion cost: 40 percent complete |
|
Costs incurred during February |
|
Direct materials | $ 50,000 |
Conversion | $ 95,000 |
Required Using the weighted-average method, calculate the following:
1. Costs per equivalent unit.
2. Cost of goods completed and transferred out.
3. Cost remaining in the ending work-in-process inventory.
4. Assume that you are the company’s controller. The production department’s February unit cost is higher than standard cost. If the manager of the first department asks you to do him a favor by increasing the ending inventory completion percentage from 40 to 60 percent to lower the unit costs, what should you do? How much would unit cost be affected by this request?
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