Question

Suburbia Company manufactures a product through a continuous single-step process. All materials are added at the beginning of processing. Production and cost data for the company for February 2016 are as follows:

Production data:
In process, beginning of month (20% converted)	1,000 units
Started during February	5,000 units
Completed and transferred to finished goods	4,500 units
In process, end of month (60% converted)	1,500 units
Manufacturing costs:
Work in process, beginning (Materials $3,000; Conversion Costs: $18,360)	$21,360
Materials	$45,000
Direct labor cost	$102,960
Applied Factory overhead cost	$51,480

Required:
Calculate the Following using the weighted average method:

Equivalent Units of Production for Direct materials	(Do not enter commas in answer for example 5,000 should be entered as 5000)
Equivalent Units of Production for Conversion Costs	(Do not enter commas in answer for example 5,000 should be entered as 5000)
Cost per Equivalent Unit – Direct Materials	(Round to 2 decimal places)
Cost per Equivalent Unit – Conversion Costs	(Round to 2 decimal places)
Total value of units transferred out	(Round to the nearest whole dollar and do not enter dollar signs or commas in answer for example $5,000 should be entered as 5000)
Total value of Ending Inventory	(Round to the nearest whole dollar and do not enter dollar signs or commas in answer for example $5,000 should be entered as 5000)

Answer 1

• All working forms part of the answer
• Working

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	4,500	100%	4,500	100%	4,500
Units of ENDING WIP	1,500	100%	1,500	60%	900
Equivalent Units of Production			6,000		5,400

COST per EUP			Material		Conversion
Cost of Beginning WIP			$          3,000.00		$                                  18,360.00
Cost incurred during the period			$        45,000.00		$                                154,440.00
Total Costs		Costs	$        48,000.00	Costs	$                                172,800.00
Equivalent units of production		EUP	6,000	EUP	5,400
Cost per EUP			$            8.00		$                                   32.00

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	4,500	$               8.00	$        36,000.00
- Conversion	4,500	$            32.00	$      144,000.00
Total Cost transferred Out				$            180,000.00
.	EUP	Cost per EUP	Total Cost
- Direct Materials	1,500	$               8.00	$        12,000.00
- Conversion	900	$           32.00	$        28,800.00
Total cost of ending WIP				$              40,800.00

• Answers, based on above

Equivalent Units of Production for Direct materials	6000
Equivalent Units of Production for Conversion Costs	5400
Cost per Equivalent Unit – Direct Materials	8
Cost per Equivalent Unit – Conversion Costs	32
Total value of units transferred out	180000
Total value of Ending Inventory	40800