Question

Pacific Ink had beginning work-in-process inventory of $750,960 on October 1. Of this amount, $307,920 was the cost of direct materials and $443,040 was the cost of conversion. The 51,000 units in the beginning inventory were 25 percent complete with respect to both direct materials and conversion costs.

During October, 108,000 units were transferred out and 33,000 remained in ending inventory. The units in ending inventory were 75 percent complete with respect to direct materials and 35 percent complete with respect to conversion costs. Costs incurred during the period amounted to $2,556,000 for direct materials and $3,278,760 for conversion.

Compute the costs of goods transferred out and the ending inventory using the weighted-average method. (Round intermediate calculations to 2 decimal places.)

Answer 1

		Percent complete
Particulars	physical units	Material	Conversion
WIP, Beginnning	51000	25%	25%
started into production (completed+Wip,closing- Wip opening)	90000
Completed and trasferred out	108000
WIP, Closing	33000	75%	35%

Particulars		Material	Conversion
Beginning WIP cost		307920	443040
Cost added during the month		2556000	3278760
Total cost incurred till date		2863920	3721800

Computation of equivalent units -

Particulars		Material	Conversion
Units completed and trasnferred out		108000	108000
WIP Ending Equivalent unit		24750	11550
Total Equivalent units		132750	119550

Computation of equivalent unit cost for direct material and conversion cost -

	Particulars		Material	Conversion
A	Total cost incurred till date (calculated above)		2863920	3721800
B	Total Equivalent unit (Calculated above)		132750	119550
	Equivalent cost per unit (A/B)		21.57	31.13

Computation of cost of goods trasferred out and the ending inventory -

Particulars		Material	Conversion
Units completed and trasnferred out		108000	108000
WIP Ending Equivalent unit		24750	11550
Equivalent cost per unit (A/B)		21.57	31.13
Cost of goods transferred out (transferred out unit*equivalent cost per unit)		2329968.81	3362228.36
Cost of WIP, Ending (WIP ending equivalent unit* equivalent cost per unit)		533951.19	359571.64

Please comment in case of any doubt.