Question

In: Accounting

The Matsui Lubricants plant uses the weighted-average method to account for its work-in-process inventories. The accounting...


The Matsui Lubricants plant uses the weighted-average method to account for its work-in-process inventories. The accounting records show the following information for a particular day:
Beginning WIP inventory
Direct materials $ 985
Conversion costs 572
Current period costs
Direct materials 28,660
Conversion costs 17,809
Quantity information is obtained from the manufacturing records and includes the following:
Beginning inventory 850 units (70% complete as to materials,
54% complete as to conversion)
Current period units started 6,000 units
Ending inventory 1,600 units (50% complete as to materials,
20% complete as to conversion)


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

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

(3) Compute the cost of goods transferred out and the ending inventory using the weighted-average method. (Do not round intermediate calculations.)

Solutions

Expert Solution

Units

Reconciliation of Units

A

Opening WIP

                     850

B

Introduced

                 6,000

C=A+B

TOTAL

                 6,850

D

Transferred

                 5,250

E=C-D

Closing WIP

                 1,600

Requirement 1

Statement of Equivalent Units

Material

Conversion Cost

Units

Complete %

Equivalent units

Complete %

Equivalent units

Transferred

                         5,250

100%

                     5,250

100%

             5,250

Closing WIP

                         1,600

50%

                        800

20%

                 320

Total

                         6,850

Total

                     6,050

Total

             5,570

Material

Conversion

Equivalent Units of Production

                         6,050

                 5,570

Requirement 2

Cost per Equivalent Units

COST

Material

Conversion Cost

TOTAL

Beginning WIP Inventory Cost

$           985.00

$               572.00

$            1,557.00

Cost incurred during period

$     28,660.00

$         17,809.00

$         46,469.00

Total Cost to be accounted for

$     29,645.00

$         18,381.00

$         48,026.00

Total Equivalent Units

                 6,050

                   5,570

Cost per Equivalent Units

$ 4.90

$ 3.30

Material

Conversion

Cost per equivalent Unit

$ 4.90

$3.30

Requirement 3

Statement of cost

Cost

Equivalent Cost/unit

Ending WIP

Transferred

Units

Cost Allocated

Units

Cost Allocated

Material

$ 4.90

                     800

$            3,920.00

                     5,250

$         25,725.00

Conversion Cost

$ 3.30

                     320

$            1,056.00

                     5,250

$         17,325.00

TOTAL

$            4,976.00

TOTAL

$         43,050.00

Material

Conversion

Total

Cost of Units Completed and Transferred out

$              25,725.00

$     17,325.00

$         43,050.00

Cost of ending Inventory

$                3,920.00

$        1,056.00

$            4,976.00


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