Question

Calculate Equivalent Units, Unit Costs, and Transferred Costs—Weighted Average Method

Chelsea Manufacturing, Inc., operates a plant that produces its own regionally-marketed Super Salad Dressing. The dressing is produced in two processes, blending and bottling. In the Blending Department, all materials are added at the beginning of the process, and labor and overhead are incurred evenly throughout the process. Chelsea uses the weighted average method. The Work in Process—Blending Department account for January 2019 follows:

Work in Process-Blending Department
January 1 inventory (4,000 gallons, 75% finished)
Direct material	$31,200
Conversion costs	8,800
Transferred to Bottling Department (70,000 gallons)
January charges:
Direct material (71,000 gallons)	568,800
Direct labor	164,000
Manufacturing overhead	184,900
January 31 inventory [ ? gallons, 60% processed]

Required

Calculate the following amounts for the Blending Department:

1. Number of units in the January 31 inventory.

2. Equivalent units for materials cost and conversion costs.

3. January cost per equivalent unit for materials and conversion costs.

4. Cost of the units transferred to the Bottling Department.

5. Cost of the incomplete units in the January 31 inventory.

Round average cost per equivalent unit to two decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number.

Chelsea Manufacturing,Inc. Blending Department Flow of Units and Equivalent Units Calculation, January 2019
		Equivalent Units
		% Work done	Direct Materials	% Work Done	Conversion Costs
Complete/Transferred	Answer	Answer	Answer	Answer	Answer
Ending Inventory	Answer	Answer	Answer	Answer	Answer
Total	Answer	b.	Answer		Answer	b.

Product Cost Report
			Direct Materials		Conversion Costs
Beginning Inventory	Answer		Answer		Answer
Current	Answer		Answer		Answer
Total Costs to Account For	Answer		Answer		Answer
÷ Total Equivalent Units			Answer		Answer
Average cost / Equivalent unit (round 2 decimal places)			Answer	c.	Answer	c.
Complete / Transferred:
Direct Materials	Answer
Conversion costs	Answer
Cost of Goods Manufactured	Answer	d.
Ending Inventory:
Direct Materials	Answer
Conversion costs	Answer
Cost of Ending Inventory	Answer	e.
Total Costs Allocated	Answer

Answer 1

fe B14 Beginning Inventory Н Chelsea Manufacturing, Inc. Blending Department 2 Flow of Units and Equivalent Units Calculation, January 2019 Equivalent Units 4 % Work Conversion % Work Direct done Materials Done Costs Complete/Transferred Ending Inventory 70,000 100% 100% 70,000 70,000 100% 5,000 60% 5,000 3,000 73,000 Total 75,000 75,000 10 Product Cost Report 11 Direct 12 Conversion Materials 13 Costs 40,000 $ $ 9,17,700 $ $ 9,57,700 $ 31,200 $ 5,68,800 $ 3,48,900 6,00,000 $ 3,57,700 75,000 $ 8.00 $ 14 Beginning Inventory 8,800 15 Current Total Costs to Account For 16 ÷ Total Equivalent Units Average cost / Equivalent unit (round 2 decimal places) 17 73,000 18 4.90 Complete / Transferred: 19 Direct Materials 20 5,60,000 3,43,000 $ 9,03,000 21 Conversion costs Cost of Goods Manufactured 22 Ending Inventory: 23 Direct Materials 24 40,000 25 Conversion costs 14,700 Cost of Ending Inventory 26 54,700 Total Costs Allocated 9,57,700 27 %24

For formulas and calculations, refer to the image below -

fe B14 Beginning Inventory Н Chelsea Manufacturing, Inc. Blending Department Flow of Units and Equivalent Units Calculation, January 2019 3 Equivalent Units 4 % Work % Work Conversion Direct Materials done Done Costs Complete/Transferred Ending Inventory |=C7*D7 70000 =C7*F7 |=C8*F8 |=4000+71000-70000 1 =C8*D8 0.6 =G7+G8 Total =C7+C8 =E7+E8 10 Product Cost Report 11 Direct 12 Conversion Materials 13 Costs =D14+E14 |=D15+E15 =C14+C15 Beginning Inventory 31200 14 8800 =568800 =164000+184900 Current 15 |=D14+D15 =E14+E15 Total Costs to Account For 16 ÷ Total Equivalent Units =E9 =G9 17 =D16/D17 =E16/E17 Average cost / Equivalent unit (round 2 decimal places) 18 Complete / Transferred: 19 =D18*E7 Direct Materials 20 =E18*G7 21 Conversion costs Cost of Goods Manufactured =C20+C21 22 Ending Inventory: 23 =D18*E8 Direct Materials 24 |=E18*G8 25 Conversion costs =C24+C25 Cost of Ending Inventory 26 Total Costs Allocated =C22+C26 27

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