P2. Computation of costs per equivalent unit. The Grinding department of Miller Inc. has provided the following costs information: Compute the costs per equivalent units for direct materials under the weighted-average method. (Round your answer to the nearest cent.) Beginning WIP: Direct materials $40,000 Conversion $10,000 $50,000 Costs added during the period: Direct materials $290,000 Conversion $120,000 $410,000 Total costs in the process to account for $460,000 The equivalent units of production for direct materials and conversion costs are 40,000 and 50,000, respectively. At the end of the period, 30,000 units are completed and transferred to the next processing department. Required: a) Compute the costs per equivalent unit for direct materials and conversion. b) Compute the production costs to be assigned to the units completed and transferred out to the next process. Solution: a) Costs per EU = Total costs/ total equivalent units Direct Materials Conversion Total costs Equivalent units Costs per EU b) Production costs to be assigned to the UCTO = Costs per EU x Number of UCTO DM Conversion Total Costs per EU Number of UCTO Production costs to be assigned to the UCTO

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

P2.	Computation of costs per equivalent unit.

	The Grinding department of Miller Inc. has provided the following costs information:
	Compute the costs per equivalent units for direct materials under the weighted-average method. (Round your answer to the nearest cent.)

	Beginning WIP:
	Direct materials	$40,000
	Conversion	$10,000	$50,000
	Costs added during the period:
	Direct materials	$290,000
	Conversion	$120,000	$410,000
	Total costs in the process to account for		$460,000

	The equivalent units of production for direct materials and conversion costs are 40,000 and 50,000, respectively.
	At the end of the period, 30,000 units are completed and transferred to the next processing department.

Required:
a)	Compute the costs per equivalent unit for direct materials and conversion.
b)	Compute the production costs to be assigned to the units completed and transferred out to the next process.

Solution:
a)	Costs per EU = Total costs/ total equivalent units
		Direct Materials	Conversion
	Total costs
	Equivalent units
	Costs per EU

b)	Production costs to be assigned to the UCTO = Costs per EU x Number of UCTO

		DM	Conversion	Total
	Costs per EU
	Number of UCTO
	Production costs to be assigned to the UCTO