Question

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	$	992
Conversion costs		407
Current period costs
Direct materials		18,540
Conversion costs		10,538

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

Beginning inventory	900	units	(60% complete as to materials, 55% complete as to conversion)
Current period units started	4,900	units
Ending inventory	1,100	units	(40% complete as to materials, 25% complete as to conversion)
Compute the equivalent units for the materials and conversion cost calculations. Compute the cost of goods transferred out and the ending inventory using the weighted-average method

Answer 1

Cost of goods transferred out $28200
Cost of the the ending inventory $2277
Calculations:
Units completed and transferred out = 900+4900-1100= 4700
	Physical Units	%Materials	EUP-Materials	%Conversion	EUP-Conversion
Units completed and transferred out	4700	100%	4700	100%	4700
Ending work in process	1100	40%	440	25%	275
Equivalent units of production	5800		5140		4975
Cost per equivalent unit of production	Materials	Conversion
Cost of beginning work in process	992	407
Costs incurred this period	18540	10538
Total costs	19532	10945
÷ Equivalent units of production	5140	4975
Cost per equivalent unit of production	3.80	2.20
Total cost accounted for:
Cost of units transferred out	EUP	Cost per EUP	Total cost
Direct materials	4700	3.8	17860
Conversion	4700	2.2	10340
Total cost transferred out				28200
	EUP	Cost per EUP	Total cost
Cost of ending work in Process
Direct materials	440	3.8	1672
Conversion	275	2.2	605
Total Cost of ending work in Process				2277