Exercise 6-36 Weighted Average Method, Unit Costs, Valuing Inventories Byford Inc. produces a product that passes through two processes. During November, equivalent units were calculated using the weighted average method: Units completed Add: Units in EWIP X Fraction complete (60,000 x 40 percent) Equivalent units of output (weighted average) Less: Units in BWIP X Fraction complete (50,000 x 70 percent) Equivalent units of output (FIFO) 196,000 24,000 220,000 BWIP Costs added Total 35,000 185,000 The costs that Byford had to account for during the month of November were as follows: $ 107 000 993,000 $1,100,000 Required: 1. Using the weighted average method, determine unit cost. 2. Under the weighted average method, what is the total cost of units transferred out? What is the cost assigned to units in ending inventory? 3. Conceptual Connection: Bill Johnson, the manager of Byford, is considering switching from Weighted Average to FIFO. Explain the key differences between the two approaches and make a recommendation to Bill about which method should be used.
Exercise 6-36 Weighted Average Method, Unit Costs, Valuing Inventories Byford Inc. produces a product that passes through two processes. During November, equivalent units were calculated using the weighted average method: Units completed Add: Units in EWIP X Fraction complete (60,000 x 40 percent) Equivalent units of output (weighted average) Less: Units in BWIP X Fraction complete (50,000 x 70 percent) Equivalent units of output (FIFO) 196,000 24,000 220,000 BWIP Costs added Total 35,000 185,000 The costs that Byford had to account for during the month of November were as follows: $ 107 000 993,000 $1,100,000 Required: 1. Using the weighted average method, determine unit cost. 2. Under the weighted average method, what is the total cost of units transferred out? What is the cost assigned to units in ending inventory? 3. Conceptual Connection: Bill Johnson, the manager of Byford, is considering switching from Weighted Average to FIFO. Explain the key differences between the two approaches and make a recommendation to Bill about which method should be used.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 6-36 Weighted Average Method, Unit Costs, Valuing Inventories
Byford Inc. produces a product that passes through two processes. During November, equivalent
units were calculated using the weighted average method:
Units completed
Add: Units in EWIP X Fraction complete
(60,000 x 40 percent)
Equivalent units of output (weighted average)
Less: Units in BWIP X Fraction complete
(50,000 x 70 percent)
Equivalent units of output (FIFO)
196,000
24,000
220,000
BWIP
Costs added
Total
35,000
185,000
The costs that Byford had to account for during the month of November were as follows:
$ 107 000
993,000
$1,100,000
Required:
1. Using the weighted average method, determine unit cost.
2. Under the weighted average method, what is the total cost of units transferred out? What is
the cost assigned to units in ending inventory?
3.
Conceptual Connection: Bill Johnson, the manager of Byford, is considering switching from
Weighted Average to FIFO. Explain the key differences between the two approaches and
make a recommendation to Bill about which method should be used.
OBJ
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