Problem 4-18 Interpreting a Report-Weighted-Average Method [LO4-2, LO4-3, LO4-4]
ID: 2421822 • Letter: P
Question
Problem 4-18 Interpreting a Report-Weighted-Average Method [LO4-2, LO4-3, LO4-4] Cooperative San José of southern Sonora state in Mexico makes a unique syrup using cane sugar and local herbs. The syrup is sold in small bottles and is prized as a flavoring for drinks and for use in desserts. The bottles are sold for $12 each. The first stage in the production process is carried out in the Mixing Department, which removes foreign matter from the raw materials and mixes them in the proper proportions in large vats. The company uses the weighted-average method in its process costing system A hastily prepared report for the Mixing Department for April appears below: Units to be accounted for Work in process, April 1 (materials 90% complete, conversion 80% complete) Started into production 5,400 34,300 Total units to be accounted for 39,700 Units accounted for as follows: 26,300 13,400 39,700 Transferred to next department Work in process, April 30 (materials 75% complete, conversion 50% complete) Total units accounted for Cost Reconciliation Cost to be accounted for Work in process, April 1 Cost added during the month S 19,656 123,905 Total cost to be accounted for $143,561 Cost accounted for as follows: Work in process, April 30 Transferred to next department $ 36,783 106,778 Total cost accounted for $143,561 Management would like some additional information about Cooperative San José's operations. Required 1. What were the equivalent units for the month? Materials Conversion Equivalent units of productionExplanation / Answer
1. STATEMENT OF EQUIVALENT PRODUCTION (WEIGHTED AVERAGE METHOD)
___________________________________________________________________________________
Particulars Input particulars output Material Conversion
% Units % Units _________
Total cost to accounted for 9$) 143561 103961 39600 287122
Total number of Equivalent units 39700 36350 33000 109050
3. Units started and completed and transferred to next department are 26,300 units
4. Yes, the manager of mixing department will be rewarded for controlling the material cost below $2.95
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