Assume the company uses a weighted average process costing system. During the cu

Question

Assume the company uses a weighted average process costing system.

During the current period 5,000 units were transferred in (cost $140,000) to Department B.

In Department B materials were added costing $25,000 and conversion costs of $60,000 were incurred.

A total of 4,800 good units were transferred to finished goods.

Direct materials are added at the beginning of the process.

Beginning WIP: 1,000 UNITS, 40% complete
   Direct materials costs = 4,070
Conversion costs = 6,008
   Transferred-in-cost = 10, 080

Ending WIP: 1,200 UNITS, 30% complete

What is the value of: a) ending WIP and. b) the goods transferred out?

Explanation / Answer

UNITS TO ACCOUNT FOR: Beginning Work in Process units 1,000.00 Add: Units Started in Process 5,000.00 Total Units to account for: 6,000.00 UNITS TO BE ACCOUNTED FOR: Units started and completed 4,800.00 Ending Work in Process 1,200.00 Total Units to be accounted for: 6,000.00 Equivalent Units: Transferred in Cost Material Cost Conversion Cost % Completion Units % Completion Units % Completion Units Units started annd completed 100% 4,800.00 100% 4,800.00 100% 4,800.00 Ending Work in Process 100% 1,200.00 100% 1,200.00 30% 360.00 Total Equivalent units 6,000.00 6,000.00 5,160.00 TOTAL COST TO ACCOUNT FOR: Transferred-in Material Conversion Beginning work in Process 10,080 4070 6,008 Cost Added during May 140,000 25,000 60,000 Total Cost to account for: 150,080 29,070 66,008 Total Cost to account for: 245,158 COST PER EQUIVALENT UNIT: Transferred-in Material Conversion Cost added during the period 150,080 29,070 66,008 Equivalent Units 6,000.00 6,000.00 5,160.00 Cost per Equivalent unit 25.01 4.85 12.79 TOTAL COST ACCOUNTED FOR: Completed Units (4800 units) Equivalent unit Total Cost Transferred-in cost 4,800.00 25.01 120048 Material cost 4,800.00 4.85 23280 Conversion Cost 4,800.00 12.79 61392 Total cost of Units completed 204,720 Ending Work in Process (1200 units) Equivalent unit Total Cost Transferred-in cost 1,200.00 25.01 30012 Material cost 1,200.00 4.85 5820 Conversion Cost 360.00 12.79 4604 Total cost of Ending Work in process: 40,436

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