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Equivalent Units and Product Cost Report—Weighted Average Method In its first month’s op-erations (January 2016), Allred...

Equivalent Units and Product Cost Report—Weighted Average Method In its first month’s op-erations (January 2016), Allred Company’s Department 1 incurred charges of $120,000 for direct materials (10,000 units), $33,000 for direct labor, and $58,000 for manufacturing overhead. At month-end, 8,800 units had been finished and transferred out. The remaining units were finished with respect to material but only 25% complete with respect to conversion costs. Assuming Allred uses the weighted average method and that materials are added at the beginning of the process and conversion costs occur evenly,

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Computation of Equivalent unit of Production - Weighted Average (Department 1)
Particulars Physical Units Material Conversion
Unit completed & Transferred out 8800 8800 8800
Closing WIP: 1200
Material (100%) 1200
Conversion (25%) 300
Equivalent units of production 10000 10000 9100
Computation of Cost per equivalent unit of Production - Weighted Average (Department 1)
Particulars Material Conversion
Opening WIP $0.00 $0.00
Cost Added during January $120,000.00 $91,000.00
Total cost to be accounted for $120,000.00 $91,000.00
Equivalent units of production 10000 9100
Cost per Equivalent unit $12.00 $10.00
Computation of Cost of ending WIP and units completed & transferred out - Weighted Average (Department 1)
Particulars Material Conversion Total
Equivalent unit of Ending WIP 1200 300
Cost per equivalent unit $12.000 $10.000
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit) $14,400 $3,000 $17,400
Units completed and transferred 8800 8800
Cost of units completed & Transferred (Unit completed * cost per equivalent unit) $105,600 $88,000 $193,600
Production cost report - Weighted Average - (Department 1)
Particulars Amount
Costs to be accounted for:
Cost of beginning WIP inventory $0.00
Cost added to production $211,000.00
Total Cost to be accounted for $211,000.00
Costs accounted for as follows:
Cost of unit transferred out $193,600
Ending WIP:
Material $14,400
Converison $3,000
Total cost accounted for $211,000
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