Question

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 705,000 units of product to finished goods. At the end of November, the work in process inventory consists of 204,000 units that are 50% complete with respect to conversion. Beginning inventory had $354,510 of direct materials and version cost. The direct material cost added in November is $2,372,490, and the conversion cost added is $3,833,250. Beginning work in process consisted of 71,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion of the units completed, 71,000 were from beginning work in process and 634,000 units were started and completed during the period. 3. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and

Answer 1

Answer

• Requirement 3 as asked

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	705,000	$                      3.00	$    2,115,000.00
- Conversion	705,000	$                      5.00	$    3,525,000.00
Total Cost transferred Out				$        5,640,000.00
Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	204,000	$                      3.00	$        612,000.00
- Conversion	102,000	$                      5.00	$        510,000.00
Total cost of ending WIP				$        1,122,000.00
Total costs accounted for					$                            6,762,000.00

• Working related to above calculations

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	705,000	100%	705,000	100%	705,000
Units of ENDING WIP	204,000	100%	204,000	50%	102,000
Equivalent Units of Production			909,000		807,000
COST per EUP			Material		Conversion
Cost of Beginning WIP			$        354,510.00		$                                201,750.00
Cost incurred during the period			$    2,372,490.00		$                            3,833,250.00
Total Costs		Costs	$    2,727,000.00	Costs	$                            4,035,000.00
Equivalent units of production		EUP	909,000	EUP	807,000
Cost per EUP			$              3.00000		$                                      5.00000