Equivalent Units and Product Cost Report—Weighted Average Method In its first mo
ID: 2527522 • Letter: E
Question
Equivalent Units and Product Cost Report—Weighted Average Method
In its first month's operations (January 2016,, Allred Company's Department 1 incurred charges of $180,000 for direct materials (20,000 units), $49,500 for direct labor, and $87,000 for manufacturing overhead. At month- end, 17,600 units had been finished and transferred out. The remaining units were finished with respect to material but only 25% complete with respect to conversion costs.
Assuming Allred uses the weighted average method and that materials are added at the beginning of the process and conversion costs occur evenly, compute the following:
The equivalent units of materials and conversion costs.
The cost per equivalent unit of materials and conversion costs.
The total cost assigned to the units transferred out.
The total cost assigned to the ending inventory.
Prove that your solutions to requirements (c) and (d) sum to the total costs to be accounted for.
Round average cost per equivalent unit to two decimal places, if applicable.
Round other answers to the nearest whole number, when appropriate.
e.
I am struggling to figure out C. D. E.
Allred Company Department 1Flow of Units and Equivalent Units Calculation Equivalent Units % Work
done Direct
Materials % Work
Done Conversion
Costs Complete/Transferred Answer Answer % Answer Answer % Answer Ending Inventory Answer Answer % Answer Answer % Answer Total Answer a. Answer Answer a.
Explanation / Answer
UNITS TO ACCOUNT FOR: Beginning Work in Process units 0 Add: Units Started in Process 20,000 Total Units to account for: 20,000 UNITS TO BE ACCOUNTED FOR: Units started and completed 17,600 Ending Work in Process 2,400 Total Units to be accounted for: 20,000 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units started and completed 100% 17,600 100% 17,600 Ending Work in Process 100% 2,400 25% 600 Total Equivalent units 20,000 18,200 TOTAL COST TO ACCOUNT FOR: Material Conversion Beginning work in Process 0 0 Cost Added during May 180,000 136,500 Total Cost to account for: 180,000 136,500 Total Cost to account for: 316,500 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 180,000 136,500 Equivalent Units 20,000 18,200 Cost per Equivalent unit 9 7.5 TOTAL COST ACCOUNTED FOR: Units started and Transferred out (17600 units) Equivalent unit Cost per EU Total Cost Material 17,600 9 158400 Conversion Cost 17,600 7.5 132000 Total Cost of Units completed and transferred out: 290400 Ending Work in process (2400 units) Equivalent unit Cost per EU Total Cost Material 2,400 9 21600 Conversison Cost 600 7.5 4500 Total cost of Ending Work in process: 26,100 Total Cost of completed units 316,500
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