Question

USING WEIGTHED AVERAGE METHOD

Alvis Construction Supply Company has a department that manufactures wood trusses (wood frames used in the construction industry). The following information is for the production of these trusses for the month of February 3,480 trusses $10,280 $15,058 17,880 trusses 16,800 trusses Work-in-process inventory, February 1 Direct materials: 100% complete Conversion: 20% complete Units started during February Units completed during February and transferred out Work-in-process inventory, February 29 Direct materials: 100% complete Conversion: 40% complete Costs incurred during February Direct materials Conversion $58,840 $91,892 Required Using the weighted-average method, calculate the following: 1-a. Costs per equivalent unit. (Round your answers to 4 decimal places.) 1-6. Cost of goods completed and transferred out (Round "Cost per EU" to 4 decimal places. Round final answer to nearest whole dollars.) 1-c. Costs remaining in the Work-in-Process Inventory account. (Round "Cost per EU" to 4 decimal places. Do not round other intermediate calculations. Round final answer to nearest whole dollars.)

Answer 1

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Alvis
Weighted Average
Units reconciliation	Whole Units
Beginning work in process inventory	3,400.00
Add: Units started in the month	17,800.00
Less: Ending work in process inventory	4,400.00
Total Units accounted for	16,800.00

Equivalent units of production	Whole Units	% Materials	EUP- Materials	% Conversion	EUP- Conversion
Units completed and transferred out	16,800.00	100%	16,800.00	100%	16,800.00
Ending work in process inventory	4,400.00	100%	4,400.00	40%	1,760.00
Equivalent units of production	21,200.00		21,200.00		18,560.00

Answer 1 a	Materials	Conversion	Total
Cost of beginning work in process inventory	10,280.00	15,058.00	25,338.00
Add: Cost of units started in the month	58,840.00	91,892.00	150,732.00
Total Costs accounted for	69,120.00	106,950.00	176,070.00
Equivalent units of production	21,200.00	18,560.00
Cost per Equivalent Unit of production	3.2604	5.7624	9.0228
Answer 1 b	EUP	Cost per EUP	Total Cost
Costs of units transferred out
Direct Materials	16,800.00	3.2604	54,775.00
Conversion	16,800.00	5.7624	96,808.00
Total transferred out			151,583.00
Answer 1 c	EUP	Cost per EUP	Total Cost
Costs of ending work in process
Direct Materials	4,400.00	3.2604	14,346.00
Conversion	1,760.00	5.7624	10,142.00
Total costs of ending work in process			24,488.00
Total costs accounted for			176,071.00

Workings for Answer 2
Equivalent units of production	Whole Units	% Materials	EUP- Materials	% Conversion	EUP- Conversion
Units completed and transferred out	16,800.00	100%	16,800.00	100%	16,800.00
Ending work in process inventory	4,400.00	100%	4,400.00	60%	2,640.00
Equivalent units of production	21,200.00		21,200.00		19,440.00

Answer 2	Materials	Conversion	Total
Cost of beginning work in process inventory	10,280.00	15,058.00	25,338.00
Add: Cost of units started in the month	58,840.00	91,892.00	150,732.00
Total Costs accounted for	69,120.00	106,950.00	176,070.00
Equivalent units of production	21,200.00	19,440.00
Cost per Equivalent Unit of production	3.2604	5.5015	8.7619
Final Answer 2	Amount $
Old- Weighted average cost per unit	9.02
New- Weighted average cost per unit	8.76
Will decrease by	0.26