Answer:
For complete understanding lets first make EPU (Equivalent Production Unit)
Direct Material Conversion
Units completed &transferred out 6,800 6,800
Closing WIP 500 100(500*20%)
Total units 7,300 6,900
Closing WIP units = Opening WIP +During the year - units completed
= 700 + 6,600 - 6,800
=500 units
On the basis of weighted average method following will be cost per unit:
Total Direct material cost/unit = (70,000 + 633,600)/7,300 = 96.3835
Total conversion cost/unit =(4,410+53,520+80,280(53,520*150%))/6,900=20.0304
Therefore, following would be the entries
WIP 767,400
Material 633,600
Conversion 133.800 (53,520+80,280)
Finished goods 791,615 (96.3838+20.0304)*6,800
WIP 791,615
Working for closing unit
Material (500*96.3835) = 48,191
Conversion (500*20%*20.0304) = 2003.043
