Question

# Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the...

Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown below.

 Direct Materials Conversion Costs Units completed 40,000 40,000 Add: Units in ending WIP * Percentage complete: 10,000 * 100% direct materials 10,000 10,000 * 40% conversion costs 4,000 Equivalent units of output 50,000 44,000

Costs:

Work in process, December 1:

Direct materials                                           \$64,000

Conversion costs                                            14,000

Total WIP on Dec. 1                                     \$78,000

Current costs:

Direct materials                                           \$510,000

Conversion costs                                             184,000

Total current costs                                      \$694,000

1. Compute the cost per equivalent unit for December using the Weighted Average Method. Round your answer to the nearest cent.
1. Determine the cost of ending work in process.
1. Determine the cost of goods transferred out.

 Physical units Direct material Conversion Total Units completed 40,000 40,000 40,000 Add: Ending WIP 10,000 10,000 4,000 Equivalent units [A] 50,000 44,000 Total cost to be accounted for Opening WIP 64,000 14,000 Incurred during December 510,000 184,000 Total costs [B] 574,000 198,000 772,000 Avg cost of equivalent unit [A/B] 11.48 4.50

Cost of goods transferred out

- Material = 40,000 x 11.48 = \$459,200

- Labor = 40,000 x 4.50 = \$180,000

Cost of Ending WIP

- Material = 10,000 x 11.48 = \$114,800

- Labor = 4,000 x 4.50 = \$18,000