Question

Chp 6 20) Weighted Average Method, Unit Costs, Valuing Inventories

Byford Inc. produces a product that passes through two processes. During November, equivalent units were calculated using the weighted average method:

Units completed	200,000
Add: Units in EWIP X Fraction complete:
(59,000 X 50%)	29,500
Equivalent units of output (weighted average)	229,500
Less: Units in BWIP X Fraction complete:
(40,000 X 60%)	24,000
Equivalent units of output (FIFO)	205,500

The costs that Byford had to account for during the month of November were as follows:

Beginning work in process	$114,000
Costs added	1,308,900
Total	$1,422,900

1. Using the weighted average method, determine unit cost. Round to the nearest cent.

$per unit

2. Under the weighted average method, what is the total cost of units transferred out? What is the cost assigned to units in ending inventory?

Cost of units transferred out	$
Cost of ending inventory	$

Answer 1

Req 1.
Equivalent units in Weighted Average:
Units completed nd transferred out				200000
	(200000*100%)
Add: Ending WIP (59000*50%)				29500
Equivalent units of production				229500
Total cost of Production:
Beginning WIP cost				114000
Add: Current cost added				1308900
Total cost incurred				1422900
Divide: Equivalent units				229500
Cost per Equivalent units				6.2
Req 2:
Cost of Units completed and transferred out				1240000
		(200000 units @6.2)
Cost of ending WIP (29500 Eq. units @6.20)				182900