Question

Alpha Company, on March 1, 2017 has a beginning Work in Process inventory of zero. All materials are added into production at the beginning of its production. There is only one production WIP inventory. On March 1, Alpha started into production 10,000 units. At the end of the month there were 5,000 units completed and transferred into the Finished Goods Inventory. The ending WIP was 40% complete with respect to conversion. For the month of March the following costs were incurred and recorded in the WIP:

            Direct Material                      $20,000

            Direct Labor                              9,000

            Factory Overhead                   40,000

Alpha uses the weighted-average process costing method. Use this information to determine for the month of March: (Round & enter final answers to the nearest whole dollar.)

            1. the total cost transferred to the finished goods inventory

            2. the total cost of the ending Work in Process inventory

Answer 1

Calculation of Equivalent Units (EU):-

Particulars	Units	% Materials	EU of Materials	% Conversion	EU of Conversion
Units Completed	5000	100%	5000	100%	5000
Ending Work in Process	5000	100%	5000	40%	2000
Total Equivalent Units	10000		10000		7000

Cost Per Equivalent Unit :-

Direct Materials = $20000 / 10000 = $2 per equivalent unit

Conversion Cost = ($9000 + $40000) / 7000 = $49000 / 7000 = $7 per equivalent unit

1) Calculation of Total costs Transferred to Finished Goods :-

Particulars	Equi. Unit	Cost per Equi. Unit	Total Cost
Direct Materials	5000	$2	$10000
Conversion	5000	$7	$35000
Total Cost			$45000

Calculation of Cost of Ending Work in Process :-

Particulars	Equi. Unit	Cost per Equi. Unit	Total Cost
Direct Materials	5000	$2	$10000
Conversion	2000	$7	$14000
Total Cost			$24000