Question

Q5

The Assembly Department uses a weighted-average process cost accounting system. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July, $190,000 of materials costs and $135,500 in conversion costs were charged to the department. The beginning work in process inventory was $93,000 on July 1, comprised of $80,000 of materials costs and $13,000 of conversion costs.

Other data for the month of July are as follows:

Beginning work in process inventory, 7/1	25,000 units	(40% complete)
Units completed and transferred out	90,000 units
Ending work in process inventory, 7/31	30,000 units	(30% complete)

What is the total cost of the July 31 Work In Process Inventory?

Answer 1

Answer

• All working forms part of the answer
• Workings

Units Reconciliation
Units to account for:
Beginning WIP	25,000
Units started this period	95,000
Total Units to account for	120,000
Total Units accounted for:
Completed & Transferred out	90,000
Ending WIP	30,000
Total Units accounted for	120,000

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	90,000	100%	90,000	100%	90,000
Units of ENDING WIP	30,000	100%	30,000	30%	9,000
Equivalent Units of Production			120,000		99,000

COST per EUP			Material		Conversion
Cost of Beginning WIP			$        80,000.00		$          13,000.00
Cost incurred during the period			$      190,000.00		$        135,500.00
Total Costs		Costs	$      270,000.00	Costs	$        148,500.00
Equivalent units of production		EUP	120,000	EUP	99,000
Cost per EUP			$                   2.25		$                     1.50

• Answer

Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	30,000	$       2.25	$        67,500.00
- Conversion	9,000	$       1.50	$        13,500.00
Total cost of ending WIP				$              81,000.00

Total cost of the July 31 Work In Process Inventory = $ 81,000 = Answer