Chapter 6, Problem 10CE

Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown on the next page.

Required:

1. 1. Calculate the unit cost for December, using the weighted average method.
2. 2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.
3. 3. What if you were asked to show that the weighted average unit cost for materials is the blend of the November unit materials cost and the December unit materials cost? The November unit materials cost is $6.60 ($66,000/10,000), and the December unit materials cost is $12.22 ($550,000/45,000). The equivalent units in BWIP are 10,000, and the FIFO equivalent units are 45,000. Calculate the weighted average unit materials cost using weights defined as the proportion of total units completed from each source (BWIP output and current output).