Question

4. Process Costing – Equivalent units of production, Weighted Average Method (7pts): The Lost Moon of Poosh, Inc. is a sports drink manufacturer who uses process costing to account for its production costs each period. The Lost Moon of Poosh uses two departments in the production of its product – Blending and Bottling. The following is information obtained for the Blending department for the month of January:

            Work in process (WIP) inventory, beginning balance:

                        Units in beginning WIP: 19,000

                        DM costs in beginning WIP: $91,000

                        Conversion Costs in beginning WIP: $49,400

            Units started / costs incurred during January:

                        Units started: 65,700

                        DM costs incurred: $167,500

                        Conversion Costs incurred: $85,900

At the end of January, as of January 31^st, there were 17,300 units left in ending WIP inventory. These partially completed units were 75% complete with respect to DM and 40% complete with respect to Conversion Costs. Use the Weighted-Average method to answer the questions below.

1. 1pt: Calculate how many units were completed and transferred out to the Bottling Department during January.

2. 2pts: Calculate the Equivalent Units of Production (EUP) for January for both DM and Conversion Costs.

3. 2pts: Calculate the cost per EUP for January for both DM and Conversion Costs. Round your final answer to two decimal places.

4. 1pt: Assign costs to the units completed and transferred out of the Blending Department to the Bottling Department during January.

5. 1pt: Assign costs to the units remaining in the Blending Department’s ending WIP inventory as of January 31^st.

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units			19,000
Add: Units Started in Process			65,700
Total Units to account for:			84,700
UNITS TO BE ACCOUNTED FOR:
Units completed and transferred		67,400
Ending Work in Process			17,300
Total Units to be accounted for:		84,700
Equivalent Units:
			UNITS	Material Cost	Conversion
				% Completion	Units	% Completion	Units
Units completed and transfrred	67400	100%	67,400	100%	67,400
Ending Work in Process	17300	75%	12,975	40%	6,920
Total Equivalent units	84700		80,375		74,320
TOTAL COST TO ACCOUNT FOR:
				Material		Conversion
Cost of Beginning WIP		91000		49400
Cost incurred			1,67,500		85,900
Total Cost to account for:		2,58,500		1,35,300
Equivalent Units			80,375		74,320
Cost per Equivalent unit		3.22		1.82
TOTAL COST ACCOUNTED FOR:
Units completed (67400 units)
				Equivalent unit	Cost per EU	Total Cost
Material				67,400	3.22	217028
Conversion Cost			67,400	1.82	122668
Total cost of units transferred out						339696
Ending Work in process (17300 units)
				Equivalent unit	Cost per EU	Total Cost
Material				12,975	3.22	41779.5
Conversison Cost			6,920	1.82	12594.4
Total cost of Ending Work in process:			54,374
Final Answer:
a. Units completed and transferred out:		67400
b. EUP of DM				80375
EUP of conversion cost			74320
c. Cost per EUP of Material			3.22
Cost per EUP of conversion cost		1.82
d. Cost of units transferred oout		3,39,696
e. Cost of Ending WIP			54,374