Question

Bachelet Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company’s first processing department for a recent month.

Work in process, beginning:
Units in process		400
Percent complete with respect to materials		90	%
Percent complete with respect to conversion		40	%
Costs in the beginning inventory:
Materials cost	$	756
Conversion cost	$	4,448
Units started into production during the month		13,000
Units completed and transferred out		13,000
Costs added to production during the month:
Materials cost	$	29,949
Conversion cost	$	362,127
Work in process, ending:
Units in process		100
Percent complete with respect to materials		50	%
Percent complete with respect to conversion		30	%

Required:

Using the weighted-average method:

a. Determine the equivalent units of production for materials and conversion costs.

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

c. Determine the cost of units transferred out of the department during the month.

d. Determine the cost of ending work in process inventory in the department.

Answer 1

Solution a:

Computation of Equivalent unit of Production - Weighted Average (First Proessing Department)
Particulars	Physical Units	Material	Conversion
Unit completed & Transferred out	13300	13300	13300
Closing WIP:	100
Material (50%)		50
Conversion (30%)			30
Equivalent units of production	13400	13350	13330

Solution b:

Computation of Cost per equivalent unit of Production - Weighted Average (First Proessing Department)
Particulars	Material	Conversion
Opening WIP	$756.00	$4,448.00
Cost Added during June	$29,949.00	$362,127.00
Total cost to be accounted for	$30,705.00	$366,575.00
Equivalent units of production	13350	13330
Cost per Equivalent unit	$2.30	$27.50

Solution c & d:

Computation of Cost of ending WIP and units completed & transferred out - Weighted Average (First Proessing Department)
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	50	30
Cost per equivalent unit	$2.30	$27.50
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$115	$825	$940
Units completed and transferred	13300	13300
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$30,590	$365,750	$396,340

Note: It is assumed that units completed and transferred out given in question is not correct as total units accounted for each not matching. Therefore we have assumed that units in ending WIP is correctly given but units completed and transferred out should be = 400 + 13000 - 100 = 13300 units