Question

1. 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	$	975
Conversion costs		542
Current period costs
Direct materials		24,170
Conversion costs		15,423

Quantity information is obtained from the manufacturing records and includes the following:

Beginning inventory	750	units	(60% complete as to materials, 56% complete as to conversion)
Current period units started	5,800	units
Ending inventory	2,000	units	(40% complete as to materials, 30% complete as to conversion)

Required:

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

Equivalent units for materials=

Equivalent units for conversion costs=

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

Materials=

Conversion Costs=

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

Costs of Goods Transferred Out=

Costs in Ending Inventory=

Answer 1

a)	Equivalent Units of Material	5350
	Equivalent units for conversion costs	5150
b)	Cost per equivalent unit
	Materials	4.70
	Conversion Costs	3.10
c)	Costs of Goods Transferred Out=	35490
	Costs in Ending Inventory=	5620
	Matsul Lubricants
	Production Cost Report
		Actual Units
	Calculation of Physical UNITS:
	Units in beginning inventory	750
	Units started during the period	5800
	Units to be accounted for	6550
		Actual Units	Equivalent Units
			Material	Conversion
	Units Completed and Transferred	4550	4550	4550
	Units in ending inventory	2000	800	600
	Total accounted for	6550	5350	5150
	Costs:
			Material	Conversion	Total
	Costs in beginning inventory		975	542	1517
	Cost added during the year		24170	15423	39593
	Total cost to account for		25145	15965	41110
	Equivalent Units from above		5350	5150
	Cost per equivalent unit		4.70	3.10
			Material	CC	Total
	Cost Accounted for
	Costs of Goods Transferred Out=		21385	14105	35490
	Costs in Ending Inventory=		3760	1860	5620
	Total Cost Accounted for		25145	15965	41110