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 795,000 units of product to finished goods. At the end of November, the work in process inventory consists of 186,000 units that are 40% complete with respect to conversion. Beginning inventory had $510,120 of direct materials and $65,205 of conversion cost. The direct material cost added in November is $3,413,880, and the conversion cost added is $1,238,895. Beginning work in process consisted of 74,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 74,000 were from beginning work in process and 721,000 units were started and completed during the period.

3. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)

Answer 1

Solution

	Material	Conversion	Total
Ending Inventory	$ 744,000	$ 111,600	$ 855,600
Units Completed and transferred	$ 3,180,000	$ 1,192,500	$ 4,372,500

Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	795,000			100%	795,000.0	100%	795,000
Closing WIP	186,000			100%	186,000.0	40%	74,400
Total	981,000			Total	981,000.0	Total	869,400

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 510,120	$ 65,205	$ 575,325
Cost incurred during period		$ 3,413,880	$ 1,238,895	$ 4,652,775
Total Cost to be accounted for		$ 3,924,000	$ 1,304,100	$ 5,228,100
Total Equivalent Units		981,000	869,400
Cost per Equivalent Units		$                   4.00	$                     1.50

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 4.00	186,000	$        744,000.00	795,000	$ 3,180,000
Conversion cost	$ 1.50	74,400	$        111,600.00	795,000	$ 1,192,500.00
TOTAL	$ 5,228,100	TOTAL	$ 855,600	TOTAL	$ 4,372,500