Weighted Average Method, Unit Cost, Valuing Inventories Polson Enterprises produ
ID: 2436675 • Letter: W
Question
Weighted Average Method, Unit Cost, Valuing Inventories
Polson Enterprises produces strawberry gelato. Output is measured in quarts. Polson uses the weighted average method. During July, Polson had the following production data:
Required:
1. Using the weighted average method, calculate the equivalent units for July.
equivalent units
2. Calculate the unit cost for July. Round your answer to the nearest cent.
$per unit
3. Assign costs to units transferred out and EWIP.
Units in process, July 1, 60% complete 54,000 quarts Units completed and transferred out 360,000 quarts Units in process, July 31, 40% complete 112,500 quarts Costs: Work in process, July 1 $81,000 Costs added during July 526,500Explanation / Answer
Answers
Calculation of Equivalent Units using Weighted Average method:
Statement of Equivalent Units
With respect to cost
Units
Complete %
Equivalent units
[A]
[B]
[A x B]
Transferred
360000
100%
360000
Closing WIP
112500
40%
45000
Total
472500
Total
405,000 Equivalent Units
---Equivalent Units = 360,000 (for Units transferred) and 45,000 (for Ending WIP) = 405,000 units.
Cost per Equivalent Units
COST
Beginning WIP Inventory Cost
$ 81,000.00
Cost incurred during period
$ 526,500.00
Total Cost to be accounted for
$ 607,500.00
Total Equivalent Units [calculated in Requirement 1]
405,000
Cost per Equivalent Units
$ 1.50
---Cost per (Equivalent) Unit = $ 1.50
Assignment of Cost----
>Cost of units transferred = 360,000 Equivalent units x $ 1.50 = $ 540,000
>Cost of Ending Work in Process = 45,000 Equivalent Units x $ 1.50 = $ 67,500
Statement of Equivalent Units
With respect to cost
Units
Complete %
Equivalent units
[A]
[B]
[A x B]
Transferred
360000
100%
360000
Closing WIP
112500
40%
45000
Total
472500
Total
405,000 Equivalent Units
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