Question

Arsenio Company manufactures a single product that goes through two processes, mixing and cooking. The following data pertain to the mixing department for August:

Work-in-process inventory, August 1
Conversion: 90% complete		29,000	units
Work-in-process inventory, August 31
Conversion: 50% complete		30,000	units
Units started		71,000
Units completed and transferred out		?
Costs
Work-in-process inventory, August 1
Material X	$	65,000
Material Y		88,200
Conversion		119,690
Costs added during August
Material X		150,700
Material Y		170,800
Conversion		279,810

Material X is added at the beginning of work in the mixing department. Material Y is also added in the mixing department, but not until units are 80% complete with regard to conversion. Conversion costs are incurred uniformly during the process. The company uses the weighted-average cost method.

Required:

1. & 2. Calculate the equivalent units and costs per equivalent unit of material X, material Y, and conversion for the mixing department.

3. Calculate the cost of units transferred out.

4. Calculate the cost of the ending Work-in-Process Inventory.

Answer 1

1 and 2:

Equivalent units of production (EUP) - Weighted Average method
	Units	% material X	EUP-Materials X	% material Y	EUP-Materials Y	% Conversion	EUP- Conversion
Units Completed and transferred out (29000+71000-30000)	70000	100%	70000	100%	70000	100%	70000
units of Ending work in process	30000	100%	30000	0%	0	50%	15000
Equivalent units of production			100000		70000		85000

Cost per Equivalent unit:	Material X	Material Y	Conversion
Cost of Beginning Work in Process	$65,000	$88,200	$1,19,690
Cost added	$1,50,700	$1,70,800	$2,79,810
Total Costs	$2,15,700	$2,59,000	$3,99,500
/Equivalent units of Production	100000	70000	85000
Cost per Equivalent unit of Production	$2.157	$3.700	$4.700

3.

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
Material X	70000	$2.157	$1,50,990
Material Y	70000	$3.700	$2,59,000
Conversion	70000	$4.700	$3,29,000
Total transferred out			$7,38,990

4.

Cost of ending work in process	EUP	Cost per EUP	Total Cost
Material X	30000	$2.157	$64,710
Material Y	0	$3.700	$0
Conversion	15000	$4.700	$70,500
Total Ending work in process			$1,35,210