Question

CloverSweet Inc. manufactures a product that goes through two departments prior to completion. The information shown in the table below is available about work in the first department, the Mixing Department, during June:

				Percent Complete
		Units		Materials			Conversion
Work in process, beginning		50,000			75	%		30	%
Started into production		430,000
Completed and transferred out		380,000
Work in process, ending		100,000			60	%		40	%
				Materials			Conversion
Work in process, beginning				$	45,500		$	25,000
Cost added during June				$	425,500		$	145,000

Required:

Assume that the company uses the weighted-average method.

1.	Determine the equivalent units for June for the first process.

     

2.	Compute the costs per equivalent unit for June for the first process. (Round your answers to 3 decimal places.)

      

3.	Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process in June. (Round intermediate calculations to 3 decimal places.)

  
      

4.	Prepare a report that reconciles the total costs assigned to the ending work in process inventory and the units transferred out with the costs in beginning inventory and costs added during the period. (Round intermediate calculations to 3 decimal places.)

      

Answer 1

• Requirement 1

	Material	Conversion
Equivalent units of production	440,000	420,000

--Working

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	380,000	100%	380,000	100%	380,000
Units of ENDING WIP	100,000	60%	60,000	40%	40,000
Equivalent Units of Production			440,000		420,000

• [2]

	Material	Conversion
Cost per Equivalent units	$                         1.070	$                              0.405

--Working

COST per EUP			Material		Conversion
Cost of Beginning WIP			$          45,500.00		$                                  25,000.00
Cost incurred during the period			$        425,500.00		$                                145,000.00
Total Costs		Costs	$        471,000.00	Costs	$                                170,000.00
Equivalent units of production		EUP	440,000	EUP	420,000
Cost per EUP			$              1.07045		$                                      0.40476

• [3]

	Material	Conversion	Total
Cost of ending WIP Inventory	$               64,200.00	$                    16,200.00	$                       80,400.00
Cost of units completed & transferred out	$            406,600.00	$                 153,900.00	$                     560,500.00

--Working

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	380,000	$                      1.07	$        406,600.00
- Conversion	380,000	$                      0.41	$        153,900.00
Total Cost transferred Out				$            560,500.00
Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	60,000	$                      1.07	$          64,200.00
- Conversion	40,000	$                      0.41	$          16,200.00
Total cost of ending WIP				$              80,400.00

• [4]

Costs to be accounted for:
Cost of Beginning WIP Inventory	$           70,500.00
Cost added to production during the period	$         570,500.00
Total Cost to be accounted for	$         641,000.00
Costs accounted for as follows:
Cost of units transferred out	$         560,500.00
Cost of Ending WIP Inventory	$           80,400.00
Total Cost accounted for	$         640,900.00
Difference due to rounding off	$                 100.00