Question

The smelting department of Company X has the following production and cost data for September:

• Production: Beginning work in process 200 units that are 100% complete as to materials and 82% complete as to conversion costs; units started into production 1,000 units; units transferred out to next department 950 units; ending work in process are 100% complete as to materials and 42% complete as to conversion costs.

• Manufacturing costs: Beginning work in process TL8,200 materials, TL9,270 labor, and TL2,200 manufacturing overhead costs. In the current period, TL50,500 worth of materials, TL25,700 worth of labor and TL32,000 worth of manufacturing overhead costs are incurred.

Q-1) Compute the material cost portion of the ending inventory if the company uses WA method to compute equivalent units.

Answer 1

• Q-1
  Material Cost portion of ending inventory = $ 12,230

Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	250	$                    48.92	$          12,230.00 [Answer]
- Conversion	105	$                    65.56	$             6,883.80
Total cost of ending WIP				$              19,113.80

• Weighted average method working for above

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	950	100%	950	100%	950
Units of ENDING WIP	250	100%	250	42%	105
Equivalent Units of Production			1,200		1,055
COST per EUP			Material		Conversion
Cost of Beginning WIP			$             8,200.00		$                                  11,470.00
Cost incurred during the period			$          50,500.00		$                                  57,700.00
Total Costs		Costs	$          58,700.00	Costs	$                                  69,170.00
Equivalent units of production		EUP	1,200	EUP	1,055
Cost per EUP			$            48.92		$                                   65.56