Shoreside Inc. uses process costing in their manufacturing operations. The compa

Question

Shoreside Inc. uses process costing in their manufacturing operations. The company uses the weighted average method and has the following information for the period: Units completed and transferred out: 10,000 Ending work in process: Materials 2,000 units 100% complete Conversion: 2,000 units 75% complete Costs per equivalent unit for materials: $1.50 Costs per equivalent unit for conversion: $2.50 A) What is the cost assigned to the units completed and transferred out? B) What is the cost assigned to the units in ending work in process?

Explanation / Answer

(a) Computation of cost assigned to units completed and transferred out: Direct Material cost = 10,000 units X $1.50 = $15,000 Add: Conversion cost = 10,000 units X $2.50 = $25,000 Cost assigned to units completed and transferred out = = $40,000 (b) Computation of cost assigned to units in ending work in process: Direct Material cost = (2,000 units X $1.50) X 100% = $3,000 Add: Conversion cost = (2,000 units X $2.50) X 75% = $3,750 Cost assigned to units in ending work in process = = $6,750

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