Question

Calculate Equivalent Units, Unit Costs, and Transferred Costs—Weighted Average Method

Kipling Manufacturing, Inc., operates a plant that produces its own regionally-marketed Super Salad Dressing. The dressing is produced in two processes, blending and bottling. In the Blending Department, all materials are added at the beginning of the process, and labor and overhead are incurred evenly throughout the process. Kipling uses the weighted average method. The Work in Process—Blending Department account for January 2016 follows:

Work in Process-Blending Department
January 1 inventory (4,000 gallons, 75 finished)
Direct material	$46,800
Conversion costs	13,200
Transferred to Bottling Department (70,000 gallons)
January charges:
Direct material (71,000 gallons)	852,000
Direct labor	246,000
Manufacturing overhead	279,000
January 31 inventory [ ? gallons, 60 processed]

Required

Calculate the following amounts for the Blending Department:

Number of units in the January 31 inventory.

Equivalent units for materials cost and conversion costs.

January cost per equivalent unit for materials and conversion costs.

Cost of the units transferred to the Bottling Department.

Cost of the incomplete units in the January 31 inventory.

Round average cost per equivalent unit to four decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number.

Kipling Manufacturing,Inc. Blending Department Flow of Units and Equivalent Units Calculation, January 2016
		Equivalent Units
		% Work done	Direct Materials	% Work Done	Conversion Costs
Complete/Transferred	Answer	Answer%	Answer	Answer%	Answer
Ending Inventory	a. Answer	Answer%	Answer	Answer%	Answer
Total	Answer	b.	Answer		Answer	b.

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 (round four decimal places)			$Answer	c.	$Answer	c.
Complete / Transferred:
Direct Materials	$Answer
Conversion costs	Answer
Cost of Goods Manufactured	$Answer	d.
Ending Inventory:
Direct Materials	$Answer
Conversion costs	Answer
Cost of Ending Inventory	$Answer	e.
Total Costs Allocated	$Answer

Answer 1

Kipling Manufacturing,Inc. Blending Department
Flow of Units and Equivalent Units Calculation, January 2016
		Equivalent Units
		% Work	Direct	% Work	Conversion
		done	Materials	Done	Costs
Complete/Transferred	71000	100%	71000	100%	71000
Ending Inventory	3000	100%	3000	60%	1800
Total	74000		74000		72800
Product Cost Report
			Direct		Conversion
			Materials		Costs
Beginning Inventory	60000		46800		13200
Current	1377000		852000		525000
Total Costs to Account For	1437000		898800		538200
÷ Total Equivalent Units			74000		72800
Average cost / Equivalent unit (round four decimal places)			12.1459		7.3929
Complete / Transferred:
Direct Materials	862359	=71000*12.1459
Conversion costs	524896	=71000*7.3929
Cost of Goods Manufactured	1387255
Ending Inventory:
Direct Materials	36438	=3000*12.1459
Conversion costs	13307	=1800*7.3929
Cost of Ending Inventory	49745
Total Costs Allocated	1437000