The PVC Company manufactures a high-quality plastic pipe that goes through three
ID: 2422160 • Letter: T
Question
The PVC Company manufactures a high-quality plastic pipe that goes through three processing stages prior to completion.
Compute the costs per equivalent unit for the month. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
Determine the cost of ending work in process inventory and of the units transferred out to the next department. (Omit the "$" sign in your response.)
Prepare a cost reconciliation report for the month. (Omit the "$" sign in your response.)
The PVC Company manufactures a high-quality plastic pipe that goes through three processing stages prior to completion.
Explanation / Answer
Weighted-Average Method
1.
Equivalent units of production
Materials
Conversion
Transferred to next department*...................
530000
530000
Ending work in process:
Materials: 44000 units x 60% complete........
26400
Conversion: 44,000 units x 40% complete....
17600
Equivalent units of production.......................
556400
547600
*Units transferred to the next department = Units in beginning work in process + Units started into production Units in ending work in process = 84000+ 490000 44000 = 530000
2.
Cost per equivalent unit
Materials
Conversion
Cost of beginning work in process.............
$ 130200
$ 21100
Cost added during the period....................
676,580
115,800
Total cost (a)...........................................
$806780
$136900
Equivalent units of production (b)..............
556400
547600
Cost per equivalent unit, (a) ÷ (b).............
$1.45
$0.25
3.
Cost of ending work in process inventory and units transferred out
Materials
Conversion
Total
Ending work in process inventory:
Equivalent units of production.
26400
17600
Cost per equivalent unit.........
$1.45
$0.25
Cost of ending work in process inventory............................
$38280
$4400
$42680
Units completed and transferred out:
Units transferred to the next department.........................
530000
530000
Cost per equivalent unit.........
$1.45
$0.25
Cost of units completed and transferred out....................
$786500
$132500
$919000
1.
Equivalent units of production
Materials
Conversion
Transferred to next department*...................
530000
530000
Ending work in process:
Materials: 44000 units x 60% complete........
26400
Conversion: 44,000 units x 40% complete....
17600
Equivalent units of production.......................
556400
547600
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