Question

Required information

Exercise 8-33 & 8-34 (Static) (LO 8-2, 3)

[The following information applies to the questions displayed below.]

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	$	976
Conversion costs		272
Current period costs
Direct materials		11,440
Conversion costs		6,644

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

Beginning inventory	600	units	(60% complete as to materials, 53% complete as to conversion)
Current period units started	4,000	units
Ending inventory	1,200	units	(40% complete as to materials, 20% complete as to conversion)

Answer 1

Equivalent units under weighted average method

Particular	material	conversion
Unit's started and transferred to next department(note below)	3400	3400
Ending inventory	(1200×40%) 480	(1200×20%) 240
Total equivalent units	3880	3640

Note: units transferred to next department = opening inventory+units in current period- ending inventory

=600+4000-1200 =3400

Compute cost per Equivalent unit

Particular	material	conversion
1 )Beginningbalance	$976	$272
2)Cost added during the period	$11440	$6644
3 )totalcost(1+2)	$12416	$6916
4)Equivalent units	3880	3640
Cost per Equivalent unit (3/4)	$3.2	$1.9

Cost assignment and

Cost of units transferred	equivalent units	cost per unit	total
Material	3400	$3.2	$10880
Conversion	3400	$1.9	$6460
Total			$17340

Cost of ending inventory	equivalent units	cost per unit	total
Material	480	$3.2	$1536
Conversion	240	$1.8	$432
Total			$1968

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