Question

Avignon Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

           

	Work in process, beginning:
	Units in process..................................................	900
	Percent complete with respect to materials........	90%
	Percent complete with respect to conversion.....	20%
	Costs in the beginning inventory:
	Materials cost.....................................................	$6,768
	Conversion cost..................................................	$3,186
	Units started into production during the month....	10,000
	Units completed and transferred out.....................	10,100
	Costs added to production during the month:
	Materials cost.....................................................	$97,104
	Conversion cost..................................................	$356,940
	Work in process, ending:
	Units in process..................................................	800
	Percent complete with respect to materials........	80%
	Percent complete with respect to conversion.....

Required:

1. Determine the equivalent units of production.
2. Determine the costs per equivalent unit.
3. Determine the cost of ending work in process inventory.
4. Determine the cost of the units transferred to the next department.

Answer 1

Avignon Inc.	Cost of Production Report
For the Period Ended		Equivalent Units
Unit information	Physical Units	Materials	Conversion
Units charged to production:
Opening Inventory in process	900.00
Units started during the period	10,000.00				Note B
Total units accounted for	10,900.00				Started and completed in the same period
					Goods finished in the period	10,100.00
Units to be assigned costs:					Less: Opening work in process	900.00
Opening Inventory in process	900.00	900.00	900.00		Started and completed in the same period	9,200.00
Started and completed in the same period	9,200.00	9,200.00	9,200.00	See note B
Goods transferred out in the period	10,100.00	10,100.00	10,100.00
Closing Inventory in process	800.00	640.00	640.00	This is closing units multiplied by % of completion
Total units to be assigned costs:	10,900.00	10,740.00	10,740.00		This is answer a.
Cost Information				Total
Costs in the beginning inventory		6,768.00	3,186.00	9,954.00
Costs added to production during the month		97,104.00	356,940.00	454,044.00
Total costs incurred		103,872.00	360,126.00	463,998.00
Cost per equivalent unit		9.67	33.53	43.20	This is answer b.
Costs allocated to completed and partially completed units
To complete opening inventory in process		8,704.36	30,178.16	38,882.51
Started and completed in the same period		88,977.88	308,487.82	397,465.70
Cost of the units transferred to the next department				436,348.21	This is answer d.
Closing Inventory in process		6,189.77	21,460.02	27,649.79	This is answer c.