Question

Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 720,000 units of product to finished goods. At the end of November, the work in process inventory consists of 199,000 units that are 50% complete with respect to conversion. Beginning inventory had $179,205 of direct materials and $163,900 of conversion cost. The direct material cost added in November is $1,199,295, and the conversion cost added is $3,114,100. Beginning work in process consisted of 64,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 64,000 were from beginning work in process and 656,000 units were started and completed during the period.

A. Compute both the direct material cost and the conversion cost per equivalent unit.

b. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)

Answer 1

		Units
Reconciliation of Units
A	Opening WIP	64,000
B	Introduced	855,000
C=A+B	TOTAL	919,000
D	Transferred	720,000
E=C-D	Closing WIP	199,000

Statement of Equivalent Units
		Material		Conversion Cost
	Units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	720,000	100%	720,000	100%	720,000
Closing WIP	199,000	100%	199,000	50%	99,500
Total	919,000	Total	919,000	Total	819,500

Cost per Equivalent Units
COST	Material	Conversion Cost	TOTAL
Beginning WIP Inventory Cost	$        179,205	$         163,900	$                343,105
Cost incurred during period	$    1,199,295	$      3,114,100	$            4,313,395
Total Cost to be accounted for	$    1,378,500	$      3,278,000	$            4,656,500
Total Equivalent Units	919,000	819,500
Cost per Equivalent Units	$ 1.50	$ 4.00

Requirement A.

	Material	Conversion
Cost per equivalent Unit	$ 1.50	$ 4.00

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$   1.50	199,000	$   298,500	720,000	$ 1,080,000
Conversion Cost	$   4.00	99,500	$ 398,000	720,000	$ 2,880,000
		TOTAL	$ 696,500	TOTAL	$ 3,960,000

Requirement B

	Material	Conversion	Total
Units Completed	$        1,080,000	$    2,880,000	$      3,960,000
Ending Inventory	$           298,500	$        398,000	$         696,500
Total Cost Accounted for	$        1,378,500	$    3,278,000	$      4,656,500