Question

Arsenio Company manufactures a single product that goes through two processes, mixing and cooking. The following data pertain to the mixing department for August:

Work-in-process inventory, August 1
Conversion: 90% complete		37,000	units
Work-in-process inventory, August 31
Conversion: 50% complete		30,000	units
Units started		63,000
Units completed and transferred out		?
Costs
Work-in-process inventory, August 1
Material X	$	61,900
Material Y		84,400
Conversion		118,470
Costs added during August
Material X		151,500
Material Y		90,600
Conversion		145,030

Material X is added at the beginning of work in the mixing department. Material Y is also added in the mixing department, but not until units are 80% complete with regard to conversion. Conversion costs are incurred uniformly during the process. The company uses the weighted-average cost method.

Required:

1. & 2. Calculate the equivalent units and costs per equivalent unit of material X, material Y, and conversion for the mixing department.

3. Calculate the cost of units transferred out.

4. Calculate the cost of the ending Work-in-Process Inventory.

Answer 1

	Material X	Material Y	Conversion
Equivalent Units of Production	100,000	70000	85000
Cost per equivalent Unit	$                        2.13	$              2.50	$                    3.10
.
Cost of units Transferred out	$                 5,41,380
.
Cost of Ending Work in process inventory	$                 1,10,520
Working
Reconciliation of Units
A	Opening WIP	37000
B	Introduced	63000
C=A+B	TOTAL	100000.00
D= C-E	Transferred	70000
E	Closing WIP	30000
.
Statement of Equivalent Units(Weighted average)
		Material X	Material Y	Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	70000	100%	70000	100%	70000	100%	70000
Closing WIP	30000	100%	30000	0%	0	50%	15000
Total	100000.00		100,000	Total	70000	Total	85000
.
Cost per Equivalent Units (Weighted average)
COST	Material X	Material Y	Conversion cost
Beginning WIP Inventory Cost	$                    61,900	$          84,400	$             1,18,470
Cost incurred during period	$                 1,51,500	$          90,600	$             1,45,030
Total Cost to be accounted for	$                 2,13,400	$       1,75,000	$             2,63,500
Total Equivalent Units	100000.00	70000	85000
Cost per Equivalent Units	$                        2.13	$              2.50	$                    3.10
.
Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP	Transferred Out
		Units	Cost Allocated	Units	Cost Allocated
Material X	$                        2.13	30000	$                64,020	70000	$           1,49,380
Material Y	$                        2.50	-	$                          -	70000	$           1,75,000
Conversion cost	$                        3.10	15000	$                46,500	70000	$           2,17,000
		TOTAL	$             1,10,520	TOTAL	$           5,41,380