Question

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

Monroe Company processes a food seasoning powder through its Compounding and Packaging departments. In yhe Compounding Department, direct materials are added at the beginning of the process, and direct labor and manufacturing overhead are incurred evenly throughout the process. Monroe uses the weighted average method. Costs in the Compounding Department can be summarized as follows:

P4-2A. Calculate Equivalent Units, Unit Costs, and Transferred Costs-Weighted Average Method Mon- roe Company processes a food seasoning powder through its Compounding and Packaging departments. rect labor and manufacturing overhead are incurred evenly throughout the process. Monroe uses the Department. in the January 31 inventory. sion costs. In the Compounding Department, direct materials are added at the beginning of the process , and die weighted average method. Costs in the Compounding Department can be summarized as follows: Inventory, August 1, 2019 (2,000 units, 40% complete) LO Direct materials Conversion costs Current period (31,000 units started) Direct materials. Direct labor. Manufacturing overhead. 980 4,100 33,010 62,560 75,789 $171,359 At August 31, 2019, 3,000 units were in process, 30% complete with respect to conversion costs. Required

At August 31, 2019, 3,00 units were in process, 30% complete with respect to conversion costs.

Calculate the following for the compounding Department:

a.) Equivalent units for materials and conversion costs during August

b.) Costs per equivalent units for materials and conversion costs

c.) Total cost of units transferred to the Packaging Department

d.) Inventory cost at August 31, 2019.

Answer 1

Where do the units come from?

Beginning Inventory	2,000
Started	31,000
Total	33,000

Where do the units go?

		% work done?	Direct materials	% Work done?	Conversion costs
Completed and transferred	30,000	100%	30,000	100%	30,000
Ending inventory	3,000	100%	3,000	30%	900
Total	33,000		33,000		30,900

Production cost report

Where do the costs come from?

	Direct materials	Conversion costs
Beginning Inventory	$980	$4,100
Current	$33,010	$138,349
Total	$33,990	$142,449
÷ Equivalent units	33,000	30,900
Average cost/ Equivalent unit	$1.03	$4.61

Where do the costs go?

Complete/ Transferred
Direct materials	$30,900
Conversion costs	$138,300
Cost of goods manufactured	$169,200
Ending inventory
Direct materials	$3,090
Conversion costs	$4,149
Cost of ending inventory	$7,239
Total cost allocated	$176,939