Weighted Average Method, Unit Cost, Valuing Inventories Cassien Inc. manufacture

Question

Weighted Average Method, Unit Cost, Valuing Inventories

Cassien Inc. manufactures products that pass through two or more processes. During June, equivalent units were computed using the weighted average method:

Required:

1. Calculate the unit cost for June using the weighted average method. Round your answer to the nearest cent.
$ per unit

2. Using the weighted average method, determine the cost of EWIP and the cost of the goods transferred out. If required, round your answers to the nearest dollar.

Units completed 53,400 Units in EWIP X Fraction complete (36,000 X 60%) 21,600 Equivalent units of output 75,000 June's costs to account for are as follows: BWIP (10,000 units, 80% complete) $50,000 Materials 90,000 Conversion costs 34,000    Total $174,000

Explanation / Answer

SOLUTION.

1. Unit cost for June

= $174,000 / 75,000 = $2.32

2. Cost of ending work in process

= 21,600 x $2.32 = $50,112.

3. Cost of the goods transferred out.

= 53,400 x $2.32 = $123,888.

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