Question

Required information

[The following information applies to the questions displayed below.]

Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 740,000 units of product to finished goods. At the end of November, the work in process inventory consists of 202,000 units that are 50% complete with respect to conversion. Beginning inventory had $306,150 of direct materials and $105,125 of conversion cost. The direct material cost added in November is $2,048,850, and the conversion cost added is $1,997,375. Beginning work in process consisted of 77,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 77,000 were from beginning work in process and 663,000 units were started and completed during the period.

Required:
1. Determine the equivalent units of production with respect to direct materials and conversion.

Equivalent Units of Production (EUP)- Weighted Average Method
	Units	% Materials	EUP- Materials	% Conversion	EUP-Conversion
Beginning work in process inventory - units Ending work in process - units Units completed and transferred out Units started this period
Beginning work in process inventory - units Ending work in process - units Units completed and transferred out Units started this period
Total units

2. Compute both the direct material cost and the conversion cost per equivalent unit.
  

Cost per equivalent unit of production		Materials		Conversion
Costs incurred this period Costs of beginning work in process Costs of ending work in process Costs transferred out
Costs incurred this period Costs of beginning work in process Costs of ending work in process Costs transferred out
Total costs	Costs		Costs
÷ Equivalent units of production	EUP		EUP
Cost per equivalent unit of production (rounded to 2 decimals)

3. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)
  

	Cost of units transferred out: EUP Cost per EUP Total cost Direct materials Conversion Total costs transferred out Costs of ending work in process EUP Cost per EUP Total cost Direct materials Conversion Total cost of ending work in process Total costs accounted for

Answer 1

1
Equivalent units of production (EUP)- weighted average method
	Units	% Materials	EUP- Materials	% Conversion	EUP- Conversion
						Units completed and transferred out	740,000	100%	740,000	100%	740,000
Ending goods in process - units	202,000	100%	202,000	50%	101,000
Total units	942,000		942,000		841,000
2
Cost per equivalent unit of production			Materials		Conversion
						Cost of beginning goods in process			$306,150		$105,125
Costs incurred this period			2,048,850		1,997,375
						Total costs		Costs	$2,355,000	Costs	$2,102,500
÷ Equivalent units of production		EUP	942,000	EUP	841,000
						Cost per equivalent unit of production (rounded to 2 decimals)			$2.50		$2.50
3
Cost of units transferred out:	EUP	Cost per EUP	Total cost
Direct materials	740,000	$2.50	1,850,000
Conversion	740,000	$2.50	1,850,000
Total costs transferred out				$3,700,000
Costs of ending goods in process	EUP	Cost per EUP	Total cost
Direct materials	202,000	$2.50	505,000
Conversion	101,000	$2.50	252,500
Total cost of ending goods in process				$757,500
Total costs accounted for				$4,457,500