Question

Cost Information and the Weighted Average Method

Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown below.

	Direct Materials				Conversion Costs
Units completed		44,000				44,000
Add: Units in ending work in process ×
Percentage complete:
19,000 × 100% direct materials		19,000				—
19,000 × 45% conversion materials		—				8,550
Eqivalent units of output		63,000				52,550
Costs:
Work in process, December 1:
Direct materials						$66,000
Conversion costs						15,000
Total work in process						$81,000
Current costs:
Direct materials						$570,000
Conversion costs						185,000
Total current costs						$755,000

Required:

1. Calculate the unit cost for December, using the weighted average method. Do NOT round interim calculations and, if required, round your answer to the nearest cent.
$  per equivalent unit

2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.

Cost of goods transferred out:

Units completed	$
Cost of EWIP
Total costs assigned (accounted for)	$

Reconciliation
Cost to account for:

BWIP	$
Current (December)
Total	$

3. What if you were asked to show that the weighted average unit cost for materials is the blend of the November unit materials cost and the December unit materials cost? The November unit materials cost is $3.47 ($66,000/19,000), and the December unit materials cost is $12.95 ($570,000/44,000). The equivalent units in BWIP are 19,000, and the FIFO equivalent units are 44,000. Calculate the weighted average unit materials cost using weights defined as the proportion of total units completed from each source (BWIP output and current output). Do NOT round interim calculations and, if required, round your answer to the nearest cent.
$  per unit

Answer 1

Cost of Prduction report (weighted avg method)
ProductionDepartment		Equivalent Units
Flow Of Units	Physical Units	Pulping	Conversion Cost
Units accounnted for:
Units completed (b)	44000	44000	44000
Ending work in progress inventory c (100% material and 45% conversion)	19000	19000	8550
Total units to be accounted for (f)	63000	63000	52550
Flow of Cost
Cost in the begnning work in progress inventory	81000	66000	15000
cost added to process	755000	$570,000	$185,000
Total Cost to be accounted for (e)	836000	636000	200000
Cost per equivalent unit (a)	13.90	10.10	3.81
Cost accounted for
Cost assigned to units transferred out (a*b)	611650	444190	167460
Cost in ending work in progress inventory (a*c)	224350	191810	32540
Total Cost accounted for	836000	636000	200000
	$
Ans 1 Unit cost per equivalent units	13.90
ans 2
Units completed	611650
Cost of EWIP	224350
Total cost	836000
ans 3	Cost C	Units	% to total units U	weighted avg cost C*U
November unit materials cost is	$3.47	19000	30.16	$1.05
December units material cost	12.95	44000	69.84	$9.04
		63000		$10.1
So it is equal to what we calculated in cost production report $10.1