Able Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Beginning work in process inventory
Units in beginning work in process inventory 300
Percent Complete with Respect to Materials 60%
Percent Complete with Respect to Conversion 30%
Costs in the beginning of inventory
Materials Cost $342
Conversion Cost $2,394
Units started into production during the month 21000
Units transferred to the next department during the month 20700
Materials Cost added during the month $44,136
Conversion Cost added during the month $546,750
Ending Work in process inventory
Units in ending work in process inventory 600
Percent Complete with Respect to Materials 80%
Respect complete with respect to conversion 30%
Required:

a. Determine the equivalent units of production.

b. Determine the costs per equivalent unit.

c. Determine the cost of ending work in process inventory.

d. Determine the cost of the units transferred to the next department

Question

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aquialaska aquialaska · Answer 1 · 2020-04-27T08:43:15+02:00

Answer and Explanation:

a. the equivalent units of production

Material Conversion cost

Unit completed and

transferred out 20,700 20,700

Ending Work in progress 480 180

(600 × 80% ) (600 × 30% )

Equivalent unit 21,180 20,880

b.The costs per equivalent unit

Material Conversion cost

Beginning

work in progress 342 2,394

Cost added $44,136 $546,750

Total cost $44,478 $549,144

Equivalent unit 21,180 20,880

Cost per unit $2.1 $26.3

c. The cost of ending work in process inventory

Material Conversion cost Total cost

Ending

work in progress 1,008 4,734 5,742

(600 × 80% × $2.1) (600 × 30% × 26.3 )

d. The cost of the units transferred to the next department

Material Conversion cost Total cost

Unit completed and

transferred 43,470 544,410 587,880

(20700 × $2.1 ) (20700 × $26.3 )