Question

In: Accounting

Zia Co. makes flowerpots from recycled plastic in two departments, molding and packaging. At the beginning...

Zia Co. makes flowerpots from recycled plastic in two departments, molding and packaging. At the beginning of the month, the molding department has 3,200 units in inventory, 70% complete as to materials. During the month, the molding department started 24,000 units. At the end of the month, the molding department had 4,800 units in ending inventory, 80% complete as to materials. Units completed in the molding department are transferred into the packaging department. Cost information for the molding department for the month follows: Beginning work in process inventory (direct materials) $ 2,400 Direct materials added during the month 39,900 QS 20-18 Weighted average: Computing equivalent units and cost per EUP (direct materials) LO C2, C3 Using the weighted-average method, compute the molding department’s (a) equivalent units of production for materials and (b) cost per equivalent unit of production for materials for the month. (Round "cost per equivalent unit of production" to 2 decimal places.)

Using the weighted-average method, assign direct materials costs to the molding department’s output—specifically, the units transferred out to the packaging department and the units that remain in process in the molding department at month-end. (Do not round intermediate calculations.)

Solutions

Expert Solution

Nos of equivalent units of direct materials

= Units completed and transferred out + (Units in ending WIP * % of completion)

= 22,400 + (4,800 * 80%)

= 26,240 units

Cost per equivalent unit = (Beginning WIP + Cost added during the period) / Nos of equivalent units

= ($2,400 + $39,900) / 26,240

= $1.612 per unit

Cost of units transferred out to packaging department = 22,400 units * $1.612 = $36,109

Cost of ending WIP = 3,840 units * $1.612 = $6,191


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