Question

ABC Pizza, a manufacturer of frozen pizzas, has the following data:

Work in Process, October 1 10,000 units*

Direct material $5,500

Conversion 17,000

Costs incurred during October

Direct material $110,000

Conversion 171,600

*Complete as to direct material; 40% complete as to conversion

The equivalent units of activity for October are:

Direct material (weighted-average method) 110,000

Conversion (weighted-average method) 92,000

Completed and transferred out 90,000

Required:  

Compute the following amounts using weighted-average process costing.

1. Cost of goods completed and transferred out during October.

2. Cost of the October 31 work-in-process inventory.  

Answer 1

Cost per equivalent unit of material = (5500+110000)/110000 = 1.05

Cost per equivalent unit of conversion = (17000+171600)/92000 = 2.05

Calculate following

1) Cost of goods completed and transferred out during october = (1.05+2.05)*90000 = $279000

2) Cost of ending work in process inventory = Total Cost-Cost of goods completed and transferred out

= 304100-279000

Cost of ending work in process = 25100

Note = Total Cost = All cost = 5500+110000+17000+171600 = 304100