The assembly division of Cranberry Watches, Inc., uses the weighted-average meth

Question

The assembly division of Cranberry Watches, Inc., uses the weighted-average method of process costing. Consider the following data for the month of May 2014:

Requirement

Summarize the total costs to account for, calculate the cost per equivalent unit for direct materials and conversion costs, and assign costs to the units completed (and transferred out) and units in ending work in process.

The begining is laid out like this

Physical Units Direct Conversion (Watches) Materials Costs 80 500 460 120 $493,360 $91,040 Beginning work in process (May 1)a Started in May 2014 Completed during May 2014 Ending ork in process (May 31) Total costs added during May 2014 Degree of completion: direct materials, 90%, conversion costs, 40% b Degree of completion: direct materials, 60%, conversion costs, 30%. $3,220,000 $1,392,000

Explanation / Answer

Total Production cost Material Conversion cost Cost of Beginning Work in process 584400 493360 91040 Current cost 4612000 3220000 1392000 Total cost to account for 5196400 3713360 1483040 Equivalent units 532 496 Cost of equivalent unit 6980 2990 Total cost per completed unit ( 6980+2990) = $ 9,970 per completed unit Statement of Cost: Cost of completed units (460 units @ 9,970 per unit) 4586200 Ending Inventory        Material (72 equivalent unit@ 6980) 502560        Conversion(36 Equiv units@2990) 107640 610200 Total cost accounted for 5196400

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