Question

4) Anders Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month. Work in process, beginning Units in process Percent complete with respect to materials Percent complete with respect to conversion Costs in the beginning inventory Materials cost Conversion cost 800 70% 10% S 1,736 S 2,288 Units started into production during the month Units completed and transferred out 18,000 18,400 Costs added to production during the month Materials cost Conversion cost S 59,908 S 520,696 Work in process, ending Units in process Percent complete with respect to materials Percent complete with respect to conversion 400 70% 20% Required: a. Determine the equivalent units of production. b. Determine the costs per equivalent unit c. Determine the cost of ending work in process inventory d. Determine the cost of the units transferred to the next department

Answer 1

Answers

• All working forms part of the answer
• Requirement ‘a’

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	18,400	100%	18,400	100%	18,400
Units of ENDING WIP	400	70%	280	20%	80
Equivalent Units of Production			18,680		18,480

• Requirement ‘b’

COST per EUP			Material		Conversion
Cost of Beginning WIP			$             1,736.00		$                                    2,288.00
Cost incurred during the period			$          59,908.00		$                                520,696.00
Total Costs		Costs	$          61,644.00	Costs	$                                522,984.00
Equivalent units of production		EUP	18,680	EUP	18,480
Cost per EUP			$              3.30000		$                                   28.30000

• Requirement ‘c’

Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	280	$                      3.30	$                924.00
- Conversion	80	$                    28.30	$             2,264.00
Total cost of ending WIP				$                 3,188.00

• Requirement ‘d’

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	18,400	$                      3.30	$          60,720.00
- Conversion	18,400	$                    28.30	$        520,720.00
Total Cost transferred Out				$            581,440.00