Weighted Average Method, Unit Cost, Valuation of Goods Transferred Out and Ending Work in Process Holmes...

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Question

Weighted Average Method, Unit Cost, Valuation of Goods Transferred Out and Ending Work in Process Holmes...

Weighted Average Method, Unit Cost, Valuation of Goods Transferred Out and Ending Work in Process

Holmes Products, Inc., produces plastic cases used for video cameras. The product passes through three departments. For April, the following equivalent units schedule was prepared for the first department:

	Direct Materials		Conversion Costs
Units completed		27,000		27,000
Units, ending work in process × Percentage complete:
8,000 × 100%		8,000		—
8,000 × 50%		—		4,000
Equivalent units of output		35,000		31,000

Costs assigned to beginning work in process: direct materials, $90,000; conversion costs, $45,750. Manufacturing costs incurred during April: direct materials, $85,000; conversion costs, $210,000. Holmes uses the weighted average method.

Required:

1. Compute the unit cost for April. If required, round your answer to the nearest cent.
$ per equivalent unit

2. Determine the cost of ending work in process and the cost of goods transferred out.

Cost of ending work in process	$
Cost of goods transferred out	$

business accounting

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Answer 1

Answer #1

1. Cost per unit = (Beginning Cost + Cost added) / Equivalent units
Material = ($90000 + $85000) / 35000 = $5 per unit
Conversion = ($45750 + $210000) / 31000 = $8.25 per unit

2.
Cost of ending work in process
Material = 8000 x $5 = $40000
Conversion = 4000 x $8.25 = $33000
Total Cost = $73000

Cost of goods transferred out
Material = 27000 x $5 = $135000
Conversion = 27000 x $8.25 = $222750
Total Cost = $357750

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Answer 2

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