Required information [The following information applies to the questions display
ID: 2412497 • Letter: R
Question
Required information [The following information applies to the questions displayed below. Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 700,000 units of product to finished goods. At the end of November, the work in process inventory consists of 180,000 units that are 30% complete with respect to conversion. Beginning inventory had $420,000 of direct materials and $139,000 of conversion cost. The direct material cost added in November is $2,220,000, and the conversion cost added is $3,254,000. Beginning work in process consisted of 60,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed. 60,000 were from beginning work in process and 640,000 units were started and completed during the period Required: 1. Determine the equivalent units of production with respect to direct materials and conversion. Units : % Materials : EUP, Materials | % C Total unitsExplanation / Answer
1. Equivalent Units of Production–Weighted Average
Equivalent Units of Production
Direct
Materials
Conversion
Units completed & transferred out
700000
700000
Units of ending work in process
Direct materials (180000 × 100%)
180000
Conversion (180000 × 30%)
54000
Equivalent units of production
880000
754000
2.
Cost per equivalent unit of production
Materials
Conversion
Cost of beginning work in process
$420000
$139000
Costs incurred this period
2220000
3254000
Total cost
Costs
$2640000
Costs
$3393000
/ equivalent units of production
EUP
880000
EUP
754000
Cost per equivalent unit of production
$3.00
$4.50
3. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending work in process inventory.
Cost of units transferred out
EUP
Cost per EUP
Total cost
Direct material
700000
$3.00
2100000
Conversion
700000
$4.50
3150000
Total costs transferred out
$5250000
Costs of ending work in process
EUP
Cost per EUP
Total cost
Direct materials
180000
$3.00
540000
conversion
54000
$4.50
243000
Total costs of ending work in process
$783000
Total costs accounted for
$6033000
Equivalent Units of Production
Direct
Materials
Conversion
Units completed & transferred out
700000
700000
Units of ending work in process
Direct materials (180000 × 100%)
180000
Conversion (180000 × 30%)
54000
Equivalent units of production
880000
754000
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