Equivalent Units and Product Cost Assignment—Weighted Average Method In its firs
ID: 2562170 • Letter: E
Question
Equivalent Units and Product Cost Assignment—Weighted Average Method In its first month of operations (May 2016), Allred Company’s Department 1 incurred charges of $72,000 for direct materials (9,000 units), $38,700 for direct labor, and $13,500 for manufacturing overhead. At month end, 8,500 units had been finished and transferred out. Those remaining were finished with respect to material but only 40% finished with respect to conversion. Assuming Allred uses the weighted average method and that materials are added at the beginning of the process and conversion occurs evenly, compute the following: The equivalent units for material and conversion. The cost per equivalent unit for material and conversion. 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. Allred Company Department 1 Flow of Units and Equivalent Units Calculation Equivalent Units % Work done Direct Materials % Work Done Conversion Costs
Explanation / Answer
Solution.
The equivalent units for material and conversion.
The cost per equivalent unit .
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.
Flow of Units and Equivalent Units Calculation Equivalent Units % Work Direct % Work Conversion done Materials Done Costs Complete/Transferred 8,500 100 8,500 100 8,500 Ending Inventory 500 100 500 40% 200 Total 9,000 9,000 8,700Related Questions
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