a. Explanation Weighted average cost method: Weighted average cost method is the method to find out the equivalent units in the process costing . Under this method work done on all completed units taken as 100% whether these units are from beginning inventory or units introduced in the process. The work done on the ending inventory is calculated as per work done on it with respect to the completed units. Compute the total units of materials and conversion costs: Particulars Physical units Materials Conversion costs Beginning work-in-process inventory 50,000 Units started this period 490,000 Total units 540,000 Completed and transferred out Total transferred out 470,000 470,000 470,000 Units in ending work-in-process inventory 70,000 Mixing 70,000 Finishing 42,000 (1) Total units 540,000 540,000 512,000 Table: (1) Compute the cost per equivalent unit for materials and conversion costs: Particulars Total Materials Conversion costs Costs in beginning work-in-process inventory $ 482,424 $ 438,400 $ 44,024 Current period costs $ 5,043,976 $ 3,449,600 $ 1,594,376 Total costs $ 5,526,400 $ 3,888,000 $ 1,638,400 Cost per equivalent unit Mixing $ 7.20 Finishing $ 3.20 Table: (2) Compute the total costs of materials and conversion costs: Particulars Total Materials Conversion costs Transferred out: Mixing $ 3,384,000 $ 3,384,000 Finishing $ 1,504,000 $ 1,504,000 Total costs $ 4,888,000 Work-in-process ending inventory Mixing $ 504,000 $ 504,000 Finishing $ 134,400 $ 134,400 Total ending work-in-process inventory $ 638,400 Total costs $ 5,526,400 $ 3,888,000 $ 1,638,400 Table: (3) Compute the completion rate of ending inventory with respect to conversion costs: Completion rate = ( 1 − Ending inventory Total conversion cost ) × 100 = ( 1 − $638,400 $1,638,400 ) × 100 = ( 1 − 0 b. To determine Determine is the cost of product transferred out. c. To determine Determine the cost of ending inventory.

Fundamentals Of Cost Accounting (6th Edition)

6th Edition

ISBN: 9781259969478

Author: WILLIAM LANEN, Shannon Anderson, Michael Maher

Publisher: McGraw Hill Education

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Chapter 8, Problem 61P

To determine

Determine the completion of ending inventory with respect to conversion costs

To determine

Determine is the cost of product transferred out.

To determine

Determine the cost of ending inventory.

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Chapter 8, Problem 60P

Chapter 8, Problem 62P

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Fundamentals Of Cost Accounting (6th Edition)

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