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Alpha Company uses the weighted-average process costing method. During the month of March the direct material...

Alpha Company uses the weighted-average process costing method. During the month of March the direct material equivalent unit cost was $10.00 and the conversion cost equivalent unit was $6.00. Alpha completed and transferred $96,000 of production to the finished goods inventory for the month of March. Use this information to determine the number of units that were transferred from the Work in Process.

Solutions

Expert Solution

Step-1:Calculate equivalent units
Cost of units completed and transferred out = Equivalent Units *Cost per equivalent units
or, $ 96,000 = Equivalent Units *$ 6.00
or, Equivalent units = $   96,000 / $    6.00
or, Equivalent units =       16,000
Working :
Cost per equivalent units = Direct Material cost per equivalent unit + Conversion cost per equivalent units
= $   10.00 + $      6.00
= $   16.00
Step-2:Calculate physical unnits
As per weighted average method, Units completed and transferred out are 100% completed.
So, Physical units and equivalent units completed and transferred out are same.
Thus, number of units that were transferred from the Work in Process is 16,000

ekkarill92 answered 1 year ago
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