Question

Silver Company manufactures kites and has the following information available for the month of April:

Work in process, April 1
(100% complete for materials, 40% for conversion)		44,000	units
Direct materials	$	72,000
Conversion cost	$	102,000
Number of units started		150,000	units
April costs
Direct materials	$	218,000
Conversion cost	$	328,000
Work in process, April 30
(100% complete for materials, 20% for conversion)		76,000	units

Required:

Using the weighted-average method, complete each of the following steps:

2. Calculate the number of equivalent units.

3. Calculate the cost per equivalent unit.

4. Reconcile the total cost of work in process.

Calculate the number of equivalent units. Physical Units Equivalent Units Direct Conversion Materials Units Completed Ending Inventory Total Units 000

Answer 1

Solution

		Equivalent units
	Physical units	Direct material	Conversion
Units completed	118000	118000	118000
Ending Inventory	76000	76000	15200
Total Units	194000	194000	133200

.

	Direct material	Conversion
Cost per Equivalent units	$         1.49485	$          3.22823

.

	Direct material	Conversion	Total Cost
Units completed	$         176,392	$          380,931	$         557,323
Ending Inventory	$         113,609	$            49,069	$         162,678
Total Cost Accounted for	$         290,001	$          430,000	$         720,001

Working

Statement of Equivalent Units
		Material		Conversion
	Units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	118,000	100%	118,000	100%	118,000
Closing WIP	76,000	100%	76,000	20%	15,200
Total	132,000	Total	194,000	Total	133,200

.

Cost per Equivalent Units
COST		Material	Conversion	TOTAL
Beginning WIP Inventory Cost		$         72,000	$      102,000	$      174,000
Cost incurred during period		$       218,000	$      328,000	$      546,000
Total Cost to be accounted for		$       290,000	$      430,000	$      720,000
Total Equivalent Units		194,000	133,200
Cost per Equivalent Units		$       1.49485	$      3.22823