Question

1. Santiago Co. has provided the following information:
     

Work in Process: Feb 1	25,000	units
(100% complete for materials, 60% complete for conversion)
Materials	$35,000
Conversion	$43,000
Units started	80,000	units
February costs
Materials	$120,000
Conversion	$234,000
Work in Process: Feb 28	15,000	units
(100% complete for materials, 20% complete for conversion)

Using the weighted average method of process costing, complete each of the following:

a. How many units were completed and transferred to Finished Goods?

b. Calculate the number of equivalent units for materials and for conversion costs.

c. Calculate the cost per equivalent unit for direct materials.  Calculate the cost per equivalent unit for conversion costs.  Now, you can calculate the total cost per equivalent unit. Round your answers to four decimal places.

d. What is the dollar amount transferred to Finished Goods? Round your answer to a whole dollar amount.

e. Calculate the cost of the ending Work in Process. Round your answer to a whole dollar amount.

Answer 1

Solution

A. 90000 units

B.

	Material	Conversion
Equivalent Units of Production	105,000	93,000

.

C.

	Material	Conversion	Total
Cost per equivalent Unit	$                1.4762	$               2.9785	$                4.4547

.

D. Amount transferred to Finished goods = $400,923

E.Ending Inventory= $31,079

Working

Reconciliation of Units
A	Beginning WIP	25,000
B	Introduced	80,000
C=A+B	TOTAL	105,000
D	Transferred out	90,000
E=C-D	Ending WIP	15,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	90,000			100%	90,000	100%	90,000
Ending WIP	15,000			100%	15,000	20%	3,000
Total	105,000			Total	105,000	Total	93,000

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost (A)		$ 35,000	$ 43,000	$ 78,000
Cost incurred during period (B)		$ 120,000	$ 234,000	$ 354,000
Total Cost to be accounted for (C=A+B)		$ 155,000	$ 277,000	$ 432,000
Total Equivalent Units(D)		105,000	93,000
Cost per Equivalent Units (E=C/D)		$               1.4762	$                2.9785	$           4.4547

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 1.4762	15,000	$          22,143.00	90,000	$        132,858.00
Conversion cost	$ 2.9785	3,000	$             8,935.50	90,000	$        268,065.00
TOTAL	$ 432,002	TOTAL	$ 31,079	TOTAL	$ 400,923