Question

Pacific Ink had beginning work-in-process inventory of $894,960 on October 1. Of this amount, $375,100 was the cost of direct materials and $519,860 was the cost of conversion. The 64,000 units in the beginning inventory were 25 percent complete with respect to both direct materials and conversion costs.

During October, 134,000 units were transferred out and 46,000 remained in ending inventory. The units in ending inventory were 75 percent complete with respect to direct materials and 35 percent complete with respect to conversion costs. Costs incurred during the period amounted to $3,446,500 for direct materials and $4,291,200 for conversion.

Required:

(1) Compute the equivalent units for the materials and conversion cost calculations.

(2) Compute the cost per equivalent unit for direct materials and for conversion costs using the weighted-average method. (Round your answers to 2 decimal places.)

(3) Compute the costs of goods transferred out and the ending inventory using the weighted-average method. (Round intermediate calculations to 2 decimal places.)

Answer 1

1
	Materials	Conversion
Units completed and transferred out	134000	134000
Work in process, ending:
46000 X 75%	34500
46000 X 35%		16100
Equivalent units of production	168500	150100
Equivalent units for materials	168500
Equivalent units for conversion costs	150100
2
	Materials	Conversion
Work in process, October 1	375100	519860
Cost added during October	3446500	4291200
Total costs	3821600	4811060
Divide by Equivalent units of production	168500	150100
Cost per Equivalent unit	22.68	32.05
Cost per Equivalent unit for materials	22.68
Cost per Equivalent unit for conversion costs	32.05
3
	Materials	Conversion	Total
Units completed and transferred out	134000	134000
X Cost per Equivalent unit	22.68	32.05
Cost of goods transferred out	3039120	4294700	7333820
	Materials	Conversion	Total
Work in process, ending units	34500	16100
X Cost per Equivalent unit	22.68	32.05
Cost of ending work in process inventory	782460	516005	1298465
Cost of goods transferred out	7333820
Cost of ending work in process inventory	1298465