Question

Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 810,000 units of product to finished goods. At the end of November, the work in process inventory consists of 197,000 units that are 90% complete with respect to conversion. Beginning inventory had $392,730 of direct materials and $123,413 of conversion cost. The direct material cost added in November is $2,628,270, and the conversion cost added is $2,344,837. Beginning work in process consisted of 61,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 61,000 were from beginning work in process and 749,000 units were started and completed during the period.

2. Compute both the direct material cost and the conversion cost per equivalent unit.

Costs of units transferred out	EUP	Cost of EUP	Total Cost
Direct Materials
Conversion
Total costs transferred out
Cost of end work in progress	EUP	Cost per EUP	Total Cost
Direct Materials
Conversion
Total cost of end Work in progress
Total costs accounted for

Answer 1

Cost of units transferred out	EUP	Cost per EUP	Total cost
Direct materials	810000	3.00	2430000
Conversion	810000	2.50	2025000
Total cost transferred out				4455000
	EUP	Cost per EUP	Total cost
Cost of ending work in Process
Direct materials	197000	3.00	591000
Conversion	177300	2.50	443250
Total Cost of ending work in Process				1034250
Total cost accounted for				5489250
Workings:
Equivalent units of production (EUP)- weighted average method
	Units	%Materials	EUP-Materials	%Conversion	EUP-Conversion
Units completed and transferred out	810000	100%	810000	100%	810000
Ending work in process	197000	100%	197000	90%	177300
Total units	1007000		1007000		987300
Cost per equivalent unit of production			Materials		Conversion
Cost of beginning work in process			392730		123413
Costs incurred this period			2628270		2344837
Total costs		Costs	3021000	Costs	2468250
÷ Equivalent units of production		EUP	1007000	EUP	987300
Cost per equivalent unit of production			3.00		2.50