Question

3. Gitano Manufacturing uses the weighted-average method in its process costing system. It manufactures a product that passes through two processing departments—Blending, and Packaging. On March 1, 2019, the first department, Blending, had a zero beginning balance. During March, 40,000 gallons were started into production. During the month, 32,000 gallons were completed, and 8,000 remained in process, partially completed.

Conversion costs are added evenly throughout each process and direct materials are added at the beginning of each process. During March, the Blending Department incurred $48,000 in direct materials costs and $211,600 in conversion costs. At the end of the month, the ending inventory in the Blending Department was 60% complete with respect to conversion costs.

Compute the Blending Department’s cost of ending work in process inventory for March.

Answer 1

Statement of Equivalent Units
Input	Particulars	Output	Material	Conversion
Units		Units	%	EOU	%	EOU
-	Opening Stock
40,000	Input Introduce
	Units Completed & Trfd. :-	32,000	100%	32,000	100%	32,000
	Closing Stock	8,000	50%	4,000	60%	4,800
40,000	Total	40,000		36,000		36,800
Statement of Equivalent Cost Per Unit
Particulars	Material ($)	Conversion ($)
Current Cost Incurred              [A]	$48,000	$211,600
Equivalent Units                      [B}	36,000	36,800
Cost per Equivalent Unit            [A / B]	$1.333	$5.750
Statement of Evalution
Particulars	Amount ($)
Units Completed & Trfd. (32,000 Units)
Direct Material    [32,000 x $ 1.333]	$42,666
Conversion Cost [32,000 x $ 5.750]	$184,000
Total Cost of FG Units Completed & Trfd. (32,000 Units)	$226,666
Closing Stock WIP (8,000 Units)
Direct Material    [4,000 x $ 1.333]	$5,334
Conversion Cost [4,800 x $ 5.750]	$27,600
Total Cost of Closing WIP Units]	$32,934
		Process Statement
Particulars	Units	Amount ($)	Particulars	Units	Amount ($)
To Opening Sock WIP	-	-	By Finished Goods Trfd.	32,000	$226,666
To Direct Material Cost	40,000	$48,000
To Conversion Cost		$211,600	By Closing Stock WIP	8,000	$32,934
Total	40,000	$259,600	Total	40,000	$259,600

Ending WIP Inventory Costs = $32,934