Question

Tannenbaum Corporation uses the weighted average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 400 units. The costs and percentage completion of these units in beginning inventory were:

                                                            Cost                % complete

            Materials costs                        5,700               65%

            Conversion costs                     6,800               45%

A total of 6,500 units were started and 5,900 units were transferred to the second processing department during the month. The first processing department incurred $125,500 of materials costs and $206,950 of conversion costs during the month.

The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs. Complete the following to determine the cost of ending WIP inventory in the first processing department (show calculations if needed):

Number of units in ending WIP

	Materials	Conversion
Units transferred to the next department
+ Ending WIP
Equivalent units of production

	Materials	Conversion
Cost of beginning WIP
+ Costs added during the period
Total cost
/ Equivalent units of production
Cost per equivalent unit

ENDING WORK-IN-PROCESS INVENTORY:	Materials	Conversion	TOTAL
Units in Ending WIP
x Cost per equivalent unit
Cost of Ending Work-in-Process inventory

           

Answer 1

Calculate following :

Number of units in ending WIP
	Material	Conversion
Units transferred to the next department	5900	5900
+ Ending WIP (400+6500-5900)	1000*50% = 500	1000*35% = 350
Equivalent units of production	6400	6250
	Material	Conversion
Cost of beginning WIP	5700	6800
+ Costs added during the period	125500	206950
Total Cost	131200	213750
/ Equivalent units of production	6400	6250
Cost per equivalent unit	20.50	34.20
ENDING WORK-IN-PROCESS INVENTORY:	Material	Conversion	Total
Units in Ending WIP	500	350
x Cost per equivalent unit	20.50	34.20
Cost of Ending Work-in-Process inventory	10250	11970	22220