Question

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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	$	1,010
Conversion costs		527
Current period costs
Direct materials		24,060
Conversion costs		14,398

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

Beginning inventory	700	units	(70% complete as to materials, 54% complete as to conversion)
Current period units started	5,700	units
Ending inventory	1,900	units	(50% complete as to materials, 25% complete as to conversion)

Required:

a. Compute the equivalent units for the materials and conversion cost calculations.

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

Compute the cost of goods transferred out and the ending inventory using the weighted-average method. (Do not round intermediate calculations.)

	Costs of goods transferred out Costs in ending inventory

Answer 1

Work in Process, Beginning	700
Add: Units started during period	5700
Less: Ending inventory	-1900
Units completed and transferred out	4500
a
	Materials	Conversion
Units completed and transferred out	4500	4500
Work in process, ending:
1900 X 50%	950
1900 X 25%		475
Equivalent units of production	5450	4975
Equivalent units for materials	5450
Equivalent units for conversion costs	4975
b
	Materials	Conversion
Work in process, beginning	1010	527
Cost added during period	24060	14398
Total costs	25070	14925
Divide by Equivalent units of production	5450	4975
Cost per Equivalent unit	4.60	3.00
Cost per Equivalent unit:
Materials	4.60
Conversion costs	3.00
c
	Materials	Conversion	Total
Units completed and transferred out	4500	4500
X Cost per Equivalent unit	4.60	3.00
Cost of Units completed and transferred out	20700	13500	34200
	Materials	Conversion	Total
Work in process, ending units	950	475
X Cost per Equivalent unit	4.60	3.00
Cost of ending work in process inventory	4370	1425	5795
Costs of goods transferred out	34200
Costs in ending inventory	5795