Concept explainers
1.
To compute: Equivalent unit of production according to weighted average method.
1.

Explanation of Solution
For direct material:
Given,
Completed goods are 295,000 units.
Work in progress is 24,000 units.
Formula for calculating equivalent unit of production (direct material),
Substitute 295,000 units for completed goods and 24,000 units for work in progress.
Hence, equivalent unit of production (direct material) is 319,000 units.
Working note:
Calculation for work in progress,
For conversion:
Given,
Completed goods are 295,000 units.
Work in progress is 9,000 units.
Formula for calculating equivalent unit of production (conversion),
Substitute, 295,000 units for completed goods and 9,000 units for work in progress in the above equation,
Hence, equivalent unit of production (conversion) is 304,000 units.
Working note:
Calculation for work in progress,
2.
To compute: Cost per equivalent unit of production.
2.

Explanation of Solution
For direct material:
Given,
Total direct material cost is $1,276,000.
Total EUP (Direct Material) is 319,000 units.
Formula for calculating cost per equivalent unit of production,
Substitute, $1,276,000 for total direct material cost and 319,000 units for total EUP (direct material).
Hence, cost per EUP (Direct Material) is $4.
Working note:
Calculation for total direct material cost,
For conversion:
Given,
Total conversion cost is $912,000.
Total EUP (Conversion) is 304,000 units.
Formula for calculating cost per equivalent unit of production,
Substitute $912,000 for total conversion cost and 304,000 units for total EUP (conversion).
Hence, cost per EUP (conversion) is $3.
Working note:
Calculation for total direct material cost,
3.
To compute: Assign cost to forming department.
3.

Explanation of Solution
Given,
Direct material cost for completed goods is $1,280,000.
Conversion cost for completed goods is $885,000.
For completed goods:
Formula for calculating the cost of unit completed,
Substitute, $1,280,000 for direct material cost for completed goods and $885,000 for conversion cost for completed goods.
Hence, cost of unit completed is $2,165,000.
Working notes:
Calculation for direct material cost for completed goods,
Calculation for conversion cost for completed goods,
For work in process (end):
Given,
Direct material cost for work in process (end) is $96,000.
Conversion cost for work in process (end) is $27,000.
Formula for calculating the cost of work in process (end),
Substitute, $96,000 for direct material cost for work in process (end) and $27,000 for conversion cost for work in process (end).
Hence, cost of work in process (end) is $123,000.
Working notes:
Calculation for direct material cost for work in process (end),
Calculation for conversion cost for work in process (end),
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Chapter 3 Solutions
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