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Equivalent Units and Product Cost Report—Weighted Average Method In its first month’s op-erations (January 2016), Allred...
Equivalent Units and Product Cost Report—Weighted Average Method In its first month’s op-erations (January 2016), Allred Company’s Department 1 incurred charges of $120,000 for direct materials (10,000 units), $33,000 for direct labor, and $58,000 for manufacturing overhead. At month-end, 8,800 units had been finished and transferred out. The remaining units were finished with respect to material but only 25% complete with respect to conversion costs. Assuming Allred uses the weighted average method and that materials are added at the beginning of the process and conversion costs occur evenly,
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Solution:
| Computation of Equivalent unit of Production - Weighted Average (Department 1) | |||
| Particulars | Physical Units | Material | Conversion |
| Unit completed & Transferred out | 8800 | 8800 | 8800 |
| Closing WIP: | 1200 | ||
| Material (100%) | 1200 | ||
| Conversion (25%) | 300 | ||
| Equivalent units of production | 10000 | 10000 | 9100 |
| Computation of Cost per equivalent unit of Production - Weighted Average (Department 1) | ||
| Particulars | Material | Conversion |
| Opening WIP | $0.00 | $0.00 |
| Cost Added during January | $120,000.00 | $91,000.00 |
| Total cost to be accounted for | $120,000.00 | $91,000.00 |
| Equivalent units of production | 10000 | 9100 |
| Cost per Equivalent unit | $12.00 | $10.00 |
| Computation of Cost of ending WIP and units completed & transferred out - Weighted Average (Department 1) | |||
| Particulars | Material | Conversion | Total |
| Equivalent unit of Ending WIP | 1200 | 300 | |
| Cost per equivalent unit | $12.000 | $10.000 | |
| Cost of Ending WIP (Equivalent unit * Cost per equivalent unit) | $14,400 | $3,000 | $17,400 |
| Units completed and transferred | 8800 | 8800 | |
| Cost of units completed & Transferred (Unit completed * cost per equivalent unit) | $105,600 | $88,000 | $193,600 |
| Production cost report - Weighted Average - (Department 1) | |
| Particulars | Amount |
| Costs to be accounted for: | |
| Cost of beginning WIP inventory | $0.00 |
| Cost added to production | $211,000.00 |
| Total Cost to be accounted for | $211,000.00 |
| Costs accounted for as follows: | |
| Cost of unit transferred out | $193,600 |
| Ending WIP: | |
| Material | $14,400 |
| Converison | $3,000 |
| Total cost accounted for | $211,000 |
ekkarill92 answered 1 year agoRelated Solutions
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the units transferred into the second department was $40,000.
Direct materials are added uniformly in the second process. Units
are measured the same way in both departments.
The second department (Polishing) had the following physical
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Units to account for:...
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Fordman Company has a product that passes through two processes:
Grinding and Polishing. During December, the Grinding Department
transferred 20,000 units to the Polishing Department. The cost of
the units transferred into the second department was $40,000.
Direct materials are added uniformly in the second process. Units
are measured the same way in both departments.
The second department (Polishing) had the following physical
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Materials
Conversion
Costs
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44,000
44,000
Add: Units in ending work in
process ×
Percentage
complete:
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materials
19,000
—
19,000 × 45% conversion
materials
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8,550
Eqivalent units of output
63,000
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Costs:
Work in process,
December 1:
Direct
materials...
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information for its Sewing Department for the month of December, as
shown below.
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Conversion Costs
Units completed
48,000
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Add: Units in ending work in process ×
Percentage complete:
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17,000
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