Question

Bachelet Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company’s first processing department for a recent month.

Work in process, beginning:
Units in process		400
Percent complete with respect to materials		90	%
Percent complete with respect to conversion		40	%
Costs in the beginning inventory:
Materials cost	$	756
Conversion cost	$	4,448
Units started into production during the month		13,000
Units completed and transferred out		13,000
Costs added to production during the month:
Materials cost	$	29,949
Conversion cost	$	362,127
Work in process, ending:
Units in process		100
Percent complete with respect to materials		50	%
Percent complete with respect to conversion		30	%

Required:

Using the weighted-average method:

a. Determine the equivalent units of production for materials and conversion costs.

b. Determine the cost per equivalent unit for materials and conversion costs.

c. Determine the cost of units transferred out of the department during the month.

d. Determine the cost of ending work in process inventory in the department.

Answer 1

Weighted Average method

Quantity schedule and equivalent units

	Quantity Schedule
Units to be accounted for:
Work in process, beginning	400
Started into production	13,000
Total units	13,400

	Equivalent units
		Materials	Conversion
Units accounted for as follows:
Transferred to next department	13,300	13,300	13,300
Work in process, ending	100	50	30
Total units	13,400	13,350	13,330

Explanation:

Work in process, ending

Materials (100*50%) = 50

Conversion (100*30%) = 30

Costs per equivalent unit

	Total Cost	Materials	Conversion
Cost to be accounted for:
Work in process, beginning	$5,204	$756	$4,448
Cost added during the month	$392,076	$29,949	$362,127
Total Cost (a)	$397,280	$30,705	$366,575
Equivalent Units (above) (b)		13,350	13,330
Cost per EU, (a) / (b)		2.30	27.5
Cost per whole unit	$29.80

Cost of ending work in process inventory and units transferred out:

	Materials	Conversion	Total
Ending work in process inventory:
Equivalent units of production	50	30
Costs per equivalent unit	2.30	27.5
Cost of ending work in process inventory	115	825	940
Units completed and transferred out:
Units transferred to the next department	13,300	13,300
Costs per equivalent unit	2.30	27.50
Cost of units completed and transferred out	30,590	365,750	396,340

Cost Reconciliation:

Cost of beginning work in process inventory $5,204

Costs added to production during the period $392,076

Total Cost $397,280

Cost of ending work in process inventory $940

Cost of units completed and transferred out $396,340

Total Cost $397,280