Question

The Matsui Lubricants plant uses the weighted-average method to account for its work-in-process inventories. The accounting records show the following information for a particular day: Beginning WIP inventory Direct materials $ 976 Conversion costs 272 Current period costs Direct materials 11,440 Conversion costs 6,644 Quantity information is obtained from the manufacturing records and includes the following: Beginning inventory 600 units (60% complete as to materials, 53% complete as to conversion) Current period units started 4,000 units Ending inventory 1,200 units (40% complete as to materials, 20% complete as to conversion) 3.value: 16.66 pointsRequired information Required: (1) Compute the equivalent units for the materials and conversion cost calculations. (2) Compute the cost per equivalent unit for direct materials and conversion costs. (Round your answers to 2 decimal places.)

Compute the cost of goods transferred out and the ending inventory using the weighted-average method. (Do not round intermediate calculations.)

Answer 1

(1) Compute the equivalent units for the materials and conversion cost calculations.

	Physical unit	%	EUP-Material	%	EUP-conversion cost
Unit transferred out	3400	100%	3400	100%	3400
Ending work in process	1200	40%	480	20%	240
Total	4600		3880		3640

(2) Compute the cost per equivalent unit for direct materials and conversion costs.

	Material	Conversion cost
Beginning wip	976	272
Cost added during priod	11440	6644
Total cost	12416	6916
Equivalent unit of production	3880	3640
Cost per equivalent unit	3.20	1.90

Cost of goods transferred out = (3.20+1.90)*3400 = 17340

Cost of ending work in process = (480*3.2+240*1.90) = 1992