Question

A firm that uses weighted average process costing has the following data:

Beginning Inventory (2,000 physical units):

            Direct Materials:          $2,500           100% complete

            Conversion:                 $4,000             80% complete

Ending Inventory (8,000 physical units):

            Direct Materials:                                100% complete

            Conversion:                                           0% complete

            

Current Costs:

            Direct Materials:        $45,500

            Conversion:               $76,000

Units started during the period                                    46,000

Units completed and transferred to finished goods     40,000

Required: Calculate the cost per unit for direct materials and conversion costs.

1. DIRECT MATERIALS(5 pts.):              ___________________

2. CONVERSION COSTS(5 pts):              ___________________

      

The Nameless Co. uses process costing and has the following information:

                                             Materials                      Conversion

Units completed                              30,000                        30,000

Units in ending WIP:

   DM: 9,000 x 60% complete          5,400eu                       --------

   CC: 9,000 x 20% complete           --------                         1,800eu

Total EU of output                           35,400eu                     31,800eu

Unit costs were $2.10 per unit for materials and $1.50 per unit for conversion.

Determine:           a.  Cost of ending inventory(10 pts.):           _________________

                              b.  Cost of goods completed(10 pts.):           _________________

Answer 1

1.)		Direct materials	Conversion
	Units Completed & transferred to finished goods	40,000	40,000
	Add : Ending working in process ( DM-100%, C-8%)	8,000	-
	Equivalent unit of Production	48,000	40,000
		Direct materials	Conversion
	Beginning Inventory -Cost	2,500	4,000
	Add: Cost incurred	45,500	76,000
	Total Costs $	48,000	80,000
	/ Equivalent unit of production	48,000	40,000
	Cost per equivalent unit $	1.00	2.00
	a.) Direct Materials = $ 1
	b.) Conversion Costs = $ 2

2.)
a.)	Cost of Ending Inventory	$ 14,040	=5400*2.1+1800*1.5
b.)	Cost of goods completed	$ 108,000	=30000*2.1+30000*1.5