Question

[The following information applies to the questions displayed below.) Victory Company uses weighted average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 810,000 units of product to finished goods. At the end of November, the work in process inventory consists of 193,000 units that are 60% complete with respect to conversion Beginning inventory had $391,170 of direct materials and $69.435 of conversion cost. The direct material cost added in November is $2,617,830, and the conversion cost added is $1,319,265. Beginning work in process consisted of 78,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion of the units completed, 78,000 were from beginning work in process and 732,000 units were started and completed during the period Required: 1. Determine the equivalent units of production with respect to direct materials and conversion Equivalent Units of Production (EUP)-Weighted Average Method Units % Materials EUP-Materials % Conversion EUP-Conversion Total units

Answer 1

1.

Equivalent units of production (EUP) - Weighted Average Method
	Units	% Materials	EUP-Materials	% Conversion	EUP-Conversion
Completed and transferred out	810,000	100%	810,000	100%	810,000
Ending WIP	193,000	100%	193,000	60%	115,800
Total units	1,003,000		1,003,000		925,800

2.

Cost per equivalent unit of production		Materials		Conversion
Beginning WIP		$391,170		$69,435
Cost added during November		2,617,830		1,319,265
Total costs	Costs	$3,009,000	Costs	$1,388,700
$\div$ Equivalent units of production	EUP	1,003,000	EUP	925,800
Cost per equivalent unit of production		$3		$1.5

3.

Cost of units transferred out	EUP	Cost per EUP	Total cost
Direct materials	810,000	$3	$2,430,000
Conversion	810,000	1.5	1,215,000
Total costs transferred out				$3,645,000
Cost of ending work in process	EUP	Cost per EUP	Total cost
Direct materials	193,000	$3	$579,000
Conversion	115,800	1.5	173,700
Total cost of ending work in process				752,700
Total cost accounted for				$4,397,700