q4 The Assembly Department uses a weighted-average process cost accounting syste
ID: 2341384 • Letter: Q
Question
q4
The Assembly Department uses a weighted-average process cost accounting system. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July, $190,000 of materials costs and $135,500 in conversion costs were charged to the department. The beginning work in process inventory was $93,000 on July 1, comprised of $80,000 of materials costs and $13,000 of conversion costs.
Other data for the month of July are as follows:
What is the total cost of the units that were transferred out of the Assembly Department in July?
Beginning work in process inventory, 7/1 25,000 units (40% complete) Units completed and transferred out 90,000 units Ending work in process inventory, 7/31 30,000 units (30% complete)Explanation / Answer
Equivalent unit of material = 90000+30000 = 120000
Equivalent unit of conversion = 90000+(30000*30%) = 99000
Cost per equivalent unit of material = (80000+190000)/120000 = 2.25
Cost per equivalent unit of conversion = (13000+135500)/99000 = 1.50
Total cost of units that were transferred out = (2.25+1.50)*90000 = $337500
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