Weighted Average Method, Unit Cost, Valuation of Goods Transferred Out and Endin

Question

Weighted Average Method, Unit Cost, Valuation of Goods Transferred Out and Ending Work in Process

Holmes Products, Inc., produces plastic cases used for video cameras. The product passes through three departments. For April, the following equivalent units schedule was prepared for the first department:

Costs assigned to beginning work in process: direct materials, $90,000; conversion costs, $33,750. Manufacturing costs incurred during April: direct materials, $75,000; conversion costs, $220,000. Holmes uses the weighted average method.

Required:

1. Compute the unit cost for April. If required, round your answer to the nearest cent.
$ per equivalent unit

2. Determine the cost of ending work in process and the cost of goods transferred out.

Cost of ending work in process $ Cost of goods transferred out $

Explanation / Answer

1.

Unit cost for April is calculated as under:

2.

Cost of ending WIP and cost of units transferred out are calculated as under:

Direct Material Conversion Cost Units completed 25,000 25,000 Units, ending WIP 8,000*100% 8,000 8,000*50% 4,000 Equivalent units of output 33,000 29,000 Cost assigned to beginning WIP $90,000 $33,750 Manufacturing costs incurred during April 75,000 220,000 Unit Cost for April 165,000 253,750 Unit Cost for April per equivalent unit 5 8.75

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