Question

Weighted Average Method, Unit Cost, Valuation of Goods Transferred Out and Ending Work in Process Holmes...

Weighted Average Method, Unit Cost, Valuation of Goods Transferred Out and Ending Work in Process

Holmes Products, Inc., produces plastic cases used for video cameras. The product passes through three departments. For April, the following equivalent units schedule was prepared for the first department:

Direct Materials Conversion Costs
Units completed 25,000 25,000
Units, ending work in process ×
  Percentage complete:
7,000 × 100% 7,000 —
7,000 × 50% — 3,500
Equivalent units of output 32,000 28,500

Costs assigned to beginning work in process: direct materials, $90,000; conversion costs, $25,125. Manufacturing costs incurred during April: direct materials, $102,000; conversion costs, $210,000. Holmes uses the weighted average method.

Required:

1. Compute the unit cost for April. If required, round your answer to the nearest cent.
$ per equivalent unit

2. Determine the cost of ending work in process and the cost of goods transferred out.

Cost of ending work in process $_______
Cost of goods transferred out $_______
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Homework Answers

Answer #1
Material Conversion Total
a Beginning work in process $90,000 $25,125 $115,125
b Cost incurred during April $102,000 $210,000 $312,000
c = (a+b) Total cost $192,000 $235,125 $427,125
d Equivalent units of output 32,000 28,500
e = (c /d) Cost per equivalent unit $6 $8.25 $14.25
f = (Percentage complete * cost per equivalent unit) Cost of ending work in process

$42,000

(7,000*6)

$28,875

(3,500 * 8.25)

 $70,875
g = (Units completed * e) Cost of good transferred out

$150,000

(25,000*6)

$206,250

(25,000*8.25)

 $356,250
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