Question

Alpha Company had the following information for FY 2017:

Work in Process - 1/1/17	100,000 units
Units Started into Production	575,000 units
Work in Process - 12/31/17	75,000 units
Direct Material put into Production	$575,000
Conversions Costs put into Production	$843,750

The beginning work in process was 100% complete as to direct materials and 75% complete as to conversion costs.  

The ending work in process was 100% complete as to direct materials and 50% complete as to conversion costs.

The beginning work in process consisted of:

Direct Material	$100,000
Conversion Costs	$112,500

Alpha Company uses the weighted-average method. Use this information to determine for FY 2017: (Round & enter final answers to: the nearest whole dollar for total dollar answers, nearest penny for unit costs or nearest whole number for units)

1. the equivalent units of production for direct materials

2. the cost per equivalent unit for materials

3. the equivalent units of production for conversion

4. the cost per equivalent unit for conversion

5. the cost that should be assigned to Alpha' work in process inventory at the end of FY 2017

Answer 1

Requirement 1:

Units completed and transferred out
Work in process - 1/1/17	100,000
Units started into production	575,000
Total units accounted for	675,000
Work in process - 12/31/17	-75,000
Units completed and transferred out	600,000

Equivalent units of production for direct materials:

Direct materials
Units completed and transferred out	600,000
Work in process - 12/31/17 [75000 x 100%]	75,000
Equivalent units of production	675,000

Requirement 2:

Direct materials	$100,000
÷ Equivalent units of production	675,000
= Cost per equivalent unit of materials	$0.15

Requirement 3:

Conversion
Units completed and transferred out	600,000
Work in process - 12/31/17 [75000 x 50%]	37,500
Equivalent units of production	637,500

Requirement 4:

Conversion costs	$112,500
÷ Equivalent units of production	637,500
= Cost per equivalent unit for conversion	$0.18

Requirement 5:

Cost of ending work in process:
Direct materials [75,000 x $0.15]	$11,250
Conversion costs [37,500 x $0.18]	$6,750
Total cost of ending work in process	$18,000