Question

Transferred-in costs, weighted-average method. Asaya Clothing, Inc. is a manufacturer of winter clothes, It has a Knitting Department and a Finishing Department This exercise focuses on the Finishing Department. Direct materials are added at the end of the process. Conversion costs are added evenly during the process. Asaya uses the weighted-average method of process costing. The following information for June 2009 is available.

 

1. Calculate equivalent units of transferred-in costs, direct materials, and conversion costs.

2. Summarize total costs to account for, and calculate the cost per equivalent unit for transferred-in direct materials, and conversion costs.

3. Assign total costs to units completed (and transferred out) and to units in ending work inprocess.

Answer 1

Transferred-in costs, weighted-average method.

 

1, 2. & 3. Solution Exhibit 17-27A calculates the equivalent units of work done to date. Solution Exhibit 17-27B summarizes total costs to account for, calculates the cost per equivalent unit of work done to date for transferred-in costs, direct materials, and conversion costs, and assigns these costs to units completed and transferred out and to units in ending work-in-process inventory.

 

SOLUTION EXHIBIT 17-27A

Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units

Weighted-Average Method of Process Costing;

Finishing Department of Asaya Clothing for June 2009.

 

*Degree of completion in this department: transferred-in costs, 100%; direct materials, 0%; conversion costs, 75%.

 

SOLUTION EXHIBIT 17-27B

Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit, and Assign Total Costs to Units Completed and to Units in Ending Work in Process;

Weighted-Average Method of Process Costing,

Finishing Department of Asaya Clothing for June 2009.