The Davidson Company uses a weighted average process costing system. The followi

Question

The Davidson Company uses a weighted average process costing system. The following information was reported for the Assembly Process for January. Materials are added at the beginning of the process and are 100%.

1. What is the cost assigned to the units completed and transferred to finishing?

a.$976,000

b.$777,500

c.$843,750

d.$708,750

e.None of these choices are correct.

2. What are the equivalent units for conversion?

a.125,000

b.100,000

c.165,000

d.133,000

e.None of these choices are correct.

Units: units % complete for conversions work in process, 1/1 60,000 15% started 105,000 work in process, 1/31 40,000 20% Costs: Materials Conversion beginning work in process $ 16,500 $ 33,250 current costs $643,500 $332,500

Explanation / Answer

Unit transferred out = 60000+105000-40000 = 125000

Equivalent unit of material = 125000+40000 = 165000

Equivalent unit of conversion = 125000+(40000*20%) = 133000

Equivalent unit of material = (16500+643500)/165000 = 4

Equivalent unit of conversion = (33250+332500)/133000 = 2.75

1) Cost assigned to units completed and transferred = 6.75*125000 = 843750

So answer is c) $843750

2) Equivalent unit of conversion

So answer is d) 133000

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