Question

Required information [The following information applies to the questions displayed below.) 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 first process. During November, the first process transferred 770,000 units of product to the second process. Additional information for the first process follows. At the end of November, work in process inventory consists of 209,000 units that are 90% complete with respect to conversion. Beginning work in process inventory had $190,905 of direct materials and $143,715 of conversion cost. The direct material cost added in November is $1,277,595, and the conversion cost added is $2,730,585. Beginning work in process consisted of 73,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion of the units completed, 73,000 were from beginning work in process and 697,000 units were started and completed during the period. 2. Compute both the direct material cost and the conversion cost per equivalent unit. Conversion Answer is not complete. Cost per equivalent unit of production Materials Costs of beginning work in process $ 190,90 Costs incurred this period 1,277,595 Total costs Costs $ 1,468,500 + Equivalent units of production EUP Cost per equivalent unit of production (rounded 0 to 2 decimals) Costs EUP 0

Answer 1

Costs per Equivalent Unit of Production		Materials		Conversions
Costs of Beginning Work in Process		190,905		1,43,715
Add: Costs Incurred during the Year		12,77,595		27,30,585
Total Costs	Costs	$14,68,500	Costs	$28,74,300
÷ Equivalent Units of Production	EUP	979,000	EUP	958,100
Costs per Equivalent Unit		$ 1.50		$ 3.00

Particular	Units	% Materials	Equivalent Units Material	% Conversion	Equivalent Units Conversion
Units Transferred Out	770,000	100%	770,000	100%	770,000
Closing Inventory	209,000	100%	209,000	90%	188,100
Total Units	979,000		979,000		958,100

Equivalent Units Material = % Material * Units

Equivalent Units Conversion = Units * % Conversion

In Weighted Average Process Costing Method there is not much relevance for units transferred from Opening Inventory.