Question

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Pacific Ink had beginning work-in-process inventory of $744,960 on October 1. Of this amount, $304,920 was the cost of direct materials and $440,040 was the cost of conversion. The 48,000 units in the beginning inventory were 30 percent complete with respect to both direct materials and conversion costs.

During October, 102,000 units were transferred out and 30,000 remained in ending inventory. The units in ending inventory were 80 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. Costs incurred during the period amounted to $2,343,600 for direct materials and $3,027,840 for conversion.

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

Answer 1

Solution

	Material	Conversion	Total
Ending Inventory	$ 504,480	$ 365,040	$ 869,520
Units Completed and transferred	$ 2,144,040	$ 3,102,840	$ 5,246,880

.Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	102,000			100%	102,000.0	100%	102,000
Closing WIP	30,000			80%	24,000.0	40%	12,000
Total	132,000			Total	126,000.0	Total	114,000

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 304,920	$ 440,040	$ 744,960
Cost incurred during period		$ 2,343,600	$ 3,027,840	$ 5,371,440
Total Cost to be accounted for		$ 2,648,520	$ 3,467,880	$ 6,116,400
Total Equivalent Units		126,000	114,000
Cost per Equivalent Units		$                 21.02	$                   30.42

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 21.02	24,000	$        504,480.00	102,000	$ 2,144,040
Conversion cost	$ 30.42	12,000	$        365,040.00	102,000	$    3,102,840
TOTAL	$ 6,116,400	TOTAL	$ 869,520	TOTAL	$ 5,246,880