Question

Hi-Test Company uses the weighted-average method of process costing to assign production costs to its products. Information for September follows. Assume that all materials are added at the beginning of its production process, and that conversion costs are added uniformly throughout the process.
Work in process inventory, September 1 (2,000 units, 100% complete with respect to
direct materials, 80% complete with respect to direct labor and overhead; includes
$45,000 of direct material cost, $25,600 in direct labor cost, $30,720 overhead cost) $ 101,320
Units started in April 28,000
Units completed and transferred to finished goods inventory 23,000
Work in process inventory, September 30 (? units, 100% complete with respect to direct materials, 40% complete with respect to direct labor and overhead) ?
Costs incurred in September
Direct materials $ 375,000
Conversion $ 341,000
Required:
Compute each of the following, assuming Hi-Test uses the weighted-average method of process costing.(Round "Cost per EUP" to 2 decimal places.)

Answer 1

Question Continuation

1. The number of physical units that were transferred out and the number that are in ending work in process inventory.

2. The number of equivalent units for materials and conversion for the month.

3. The cost per equivalent unit of materials and conversion for the month.

Answer:

See explanation below

Explanation:

1. .

Units to account for is given as:

Beginning (Work in Process) ------_--------- $2,000

Unit Started at the beginning (April) ----- $28,000

Total = $2,000 + $28,000 = $30,000

Calculating total units accounted for.

Units completed and transferred out ------- $23,000

Ending (Work in Process) ------------------------ $7,000

Total Units = $23,000 + $7,000 = $30,000

2.

Units completed and transferred out

=> $23,000 (units) => 100% (% Materials) => $23,000 (EUP Materials) => 100% (% Conversion) => $23,000 (EUP Conversion)

Units of ending work in process

=> $7,000 (units) => 100% (% Materials) => $7,000 (EUP Materials) => 40% (% Conversion) => $2,800 (EUP Conversion)

Equivalent Units of Production

=> $30,000 (units) => 100% (% Materials) => $30,000 (EUP Materials) => (% Conversion) => $25,800 (EUP Conversion)

3.

Cost per equivalent units of production

Cost of beginning work in process => $45,000 (Direct materials) => $56,320 (conversion)

Cost incurred during this period => $375,000 (Direct materials) => $341,000 (conversion)

Total Cost => $420,000 (Direct materials) => $397,320 (conversion)

Equivalent Units of Production => $30,000 (Direct materials) => $25,800 (conversion)

Cost per equivalent unit of production => $14.00 (Direct materials) => 15.40 (conversion)

Cost per equivalent unit of production is calculated by Total Cost / Equivalent unit of production