Question

Weighted Average Method, Unit Cost, Valuing Inventories Applegate Enterprises produces premier raspberry jam. Output is measured in pints. Applegate uses the weighted average method. During January, Applegate had the following production data: Units in process, January 1, 60% complete 156,000 pints Units completed and transferred out 700,000 pints Units in process, January 31, 40% complete 200,000 pints Costs: Work in process, January 1 $156,000 Costs added during January 624,000 Required: 1. Using the weighted average method, calculate the equivalent units for January. equivalents units 2. Calculate the unit cost for January. Round your answer to the nearest cent. $ per unit 3. Assign costs to units transferred out and EWIP. Cost of goods transferred out $ Ending work in process (EWIP) $

Answer 1

Answer:

1. 780,000 pints

2. $1

3. $780,000

Explanation:

1. The computation of the equivalent units of production is shown below:

= Units completed and transferred out + completed units in ending inventory  × completion percentage

= 700,000 pints + 200,000 pints × 40%

= 780,000 pints

2. The computation of the unit cost for January month is shown below:

= (Beginning Work in process + Costs added during January) ÷  equivalent units

= ($156,000 + $624,000) ÷ (780,000 pints)

= $1

3. The computation of the assigned units is shown below:

= Units completed and transferred out × unit cost + completed units in ending inventory  × completion percentage × unit cost

= 700,000 pints  × $1 + 200,000 pints × 40% ×$1

= $780,000