Question

Wit Company uses the weighted-average method in its process costing system. Information for the month of May concerning Department A, the first stage of the company's production process follows: Material costs are added at the beginning of the process. The ending work in process is 50% complete with respect to conversion costs. How would the costs be distributed

Answer 1

Answer:

See explanation below for answer regarding the distribution of the costs

Explanation:

Given the information we can't actually list a cost amount as no cost figures were included. Thus we are limited to what we know in the scenario.

Material costs are added at the beginning of the process. Which means that all units in the process whether in process or completed will be costed at the full price of the materials as they are all added into the process already. Thus these costs can be recognized and capitalized to the units in process or completed irrespective of the process.

Conversion costs are normally capitalized as the process is being completed. Thus 50% of the conversion costs will be applied to the ending work in process.

Next one will need to the calculate the total equivalent units which are the completed units plus the 50% of units in ending work in process.

Next we apply costs to the equivalent units using the weight average cost of conversion costs and materials.