Question

1. Linton Inc. uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were

Cost % complete

Material costs 6,000 50%

conversion costs 9900 30%

A total of 9,200 units were started and 8,200 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

Material costs $13,900

Conversion costs $322,500

The ending inventory was 80% complete with respect to materials and 20% complete with respect to conversion costs. Required (7 Points): Using the weighted-average method: a. Determine the equivalent units of production for materials and conversion costs. b. Determine the cost per equivalent unit for materials and conversion costs, and the total product cost per equivalent unit. c. Determine the cost of units transferred out of the department during the month. d. Determine the cost of ending work in process inventory in the department.

Answer 1

1) Equivalent unit :

	Whole unit	%	EUP-material	%	EUP-conversion
Unit transferred out	8200	100%	8200	100%	8200
Ending work in process	1800	80%	1440	20%	360
Total	10000		9640		8560

b) Determine the cost per equivalent unit for materials and conversion costs, and the total product cost per equivalent unit

Material = (6000+13900)/9640 = 2.06432 per equivalent unit

Conversion = (9900+322500)/8560 = 38.83178 per equivalent unit

Total product cost per unit = 2.06432+38.83178 = 40.8961

c. Determine the cost of units transferred out of the department during the month

Cost of unit transferred out = 40.8961*8200 = 335348

d. Determine the cost of ending work in process inventory in the department.

Ending work in process = 1440*2.06432+360*38.83178 = 16952