Question

Equivalent Units and Product Cost Report—Weighted Average Method

In its first month's operations (January 2016,, Allred Company's Department 1 incurred charges of $180,000 for direct materials (20,000 units), $49,500 for direct labor, and $87,000 for manufacturing overhead. At month- end, 17,600 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, compute the following:

The equivalent units of materials and conversion costs.

The cost per equivalent unit of materials and conversion costs.

The total cost assigned to the units transferred out.

The total cost assigned to the ending inventory.

Prove that your solutions to requirements (c) and (d) sum to the total costs to be accounted for.

Round average cost per equivalent unit to two decimal places, if applicable.

Round other answers to the nearest whole number, when appropriate.

Allred Company Department 1 Flow of Units and Equivalent Units Calculation
		Equivalent Units
		% Work done	Direct Materials	% Work Done	Conversion Costs
Complete/Transferred	Answer	Answer %	Answer	Answer %	Answer
Ending Inventory	Answer	Answer %	Answer	Answer %	Answer
Total	Answer	a.	Answer		Answer	a.

Product Cost Report
			Direct Materials		Conversion Costs
Beginning Inventory	$Answer		$Answer		$Answer
Current	Answer		Answer		Answer
Total Costs to Account For	$Answer		$Answer		$Answer
÷ Total Equivalent Units			Answer		Answer
Average cost / Equivalent unit			$Answer	b.	$Answer	b.
Complete / Transferred:
Direct Materials	$Answer
Conversion costs	Answer
Cost of Goods Manufactured	$Answer	c.
Ending Inventory:
Direct Materials	$Answer
Conversion costs	Answer
Cost of Ending Inventory	$Answer	d.
Total Costs Allocated	$Answer	e. I am struggling to figure out C. D. E.

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				0
Add: Units Started in Process				20,000
Total Units to account for:				20,000
UNITS TO BE ACCOUNTED FOR:
Units started and completed				17,600
Ending Work in Process				2,400
Total Units to be accounted for:				20,000
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units started and completed			100%	17,600	100%	17,600
Ending Work in Process			100%	2,400	25%	600
Total Equivalent units				20,000		18,200
TOTAL COST TO ACCOUNT FOR:
			Material		Conversion
Beginning work in Process			0		0
Cost Added during May			180,000		136,500
Total Cost to account for:			180,000		136,500
Total Cost to account for:					316,500
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			180,000		136,500
Equivalent Units			20,000		18,200
Cost per Equivalent unit			9		7.5
TOTAL COST ACCOUNTED FOR:
Units started and Transferred out (17600 units)
			Equivalent unit	Cost per EU	Total Cost
Material			17,600	9	158400
Conversion Cost			17,600	7.5	132000
Total Cost of Units completed and transferred out:					290400
Ending Work in process (2400 units)
			Equivalent unit	Cost per EU	Total Cost
Material			2,400	9	21600
Conversison Cost			600	7.5	4500
Total cost of Ending Work in process:					26,100
Total Cost of completed units					316,500