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In: Accounting

Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added...

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 755,000 units of product to finished goods. At the end of November, the work in process inventory consists of 199,000 units that are 50% complete with respect to conversion. Beginning inventory had $558,090 of direct materials and $128,175 of conversion cost. The direct material cost added in November is $3,734,910, and the conversion cost added is $2,435,325. Beginning work in process consisted of 67,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 67,000 were from beginning work in process and 688,000 units were started and completed during the period.

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

Solutions

Expert Solution

Victory Company
Equivalent units of production (EUP) - Weighted Average method
Units % material EUP-Materials % Conversion EUP- Conversion
Units Completed and transferred out 755000 100% 755000 100% 755000
units of Ending work in process 199000 100% 199000 50% 99500
Equivalent units of production 954000 854500
Cost per Equivalent unit: Material Conversion
Cost of Beginning Work in Process $558,090 $128,175
Cost added $3,734,910 $2,435,325
Total Costs $4,293,000 $2,563,500
/Equivalent units of Production 954000 854500
Cost per Equivalent unit of Production $4.50 $3.00
Cost of Beginning Work in Process $686,265.00
Cost added $6,170,235.00
Total costs to account for $6,856,500.00
Total costs accounted for $6,856,500.00
Difference due to rounding cost / unit $0.00
Cost Assignment and reconciliation
Cost of Units Transferred Out EUP Cost per EUP Total Cost
Material 755000 $4.50 $3,397,500
Conversion 755000 $3.00 $2,265,000
Total transferred out $5,662,500
Cost of ending work in process EUP Cost per EUP Total Cost
Material 199000 $4.50 $895,500
Conversion 99500 $3.00 $298,500
Total Ending work in process $1,194,000
Total costs assigned $6,856,500

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