Question

a company uses the weighted average method of process costing. it had 40,000 units in beginning inventory, which were 70% complete as to materials and 80% complete as to conversion. during the month, it started 110,000 units. at the end of the month, 32,000 units were in inventory, which were 65% complete as to materials and 60% complete as to 4 conversion. cost information is as follows:

Answer 1

A company uses the weighted average method of process costing. It had 40,000 units in the beginning inventory, which were 70% complete as to materials and 80% complete as to conversion and during month it started 110,000 units. At the end of the month, 32,000 units were in inventory which 65% complete as to materials and 60% complete as to conversion. The total cost accounted for the month is $1,614,360 with cost per equivalent unit of productions for direct material is $5.70 and for conversion is $4.87

Weighted average method is an approach to valuing a company's business inventory stock and determines the average cost of all inventory items.

Please reference to the first picture for more information about this case.

From the information we know that:

Beginning work in process inventory:

Direct materials costs                 $158,200

Conversion costs                        $193,600

Total beginning inventory cost                   $351,800

Costs added during the month:

Direct materials costs                $632,960

Conversion costs                       $629,600

Total costs added during the month        $1,262,560

Total production costs                               $1,614,360

                                    Units      Materials%     Conversion%

Beginning inventory  40,000         70%                80%

Unit started                 110,000

Ending inentory          32,000        65%                60%

To find the costs per equivalent units of production, we need to know the total equivalent units of production first.

The total equivalent units of production could be found by adding the units completed and transferred out with units of ending work in process. The equivalent units completed and transferred out could be calculated by adding the unit started at the month to the beginning inventory and eliminating the ending inventory units. Please make sure that the beginning inventory amount calculated here should be counted as 100% instead of the presented percentage in the case.

Equivalent units of production                         Direct materials  Conversion

Equivalent units completed and transferred out  129,200            130,800

Equivalent units for ending work in process         20,800              19,200

Total equivalent units of production                     138,800             169,199

Cost per Equivalent unit of production        Direct materials  Conversion

Costs of beginning work in process inventory  $158,200        $193,600

Costs added during month                                 $632,960        $629,600

Total costs                                                            $791,160          $823,200

Equivalent units of production                             138,800           169,199

Costs per equivalent units of production              $5.70              $4.87

For more complete calculation, please refer to the second image below.

Learn more about Weighted Average Method here: brainly.com/question/15095915

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