The Matsui Lubricants plant uses the weighted-average method to account for its
ID: 2464674 • Letter: T
Question
The Matsui Lubricants plant uses the weighted-average method to account for its work-in-process inventories. The accounting records show the following information for a particular day:
Beginning WIP inventory
Direct materials $ 1,950
Conversion costs 536
Current period costs
Direct materials 22,600
Conversion costs 13,200
Quantity information is obtained from the manufacturing records and includes the following:
Beginning inventory 650 units (59% complete as to materials, 52% complete as to conversion)
Current period units started 3,800 units
Ending inventory 1,200 units (41% complete as to materials, 22% complete as to conversion)
Required: Compute the cost of goods transferred out and the ending inventory using the weighted-average method. (Do not round your intermediate calculations. Round your final answers to nearest whole dollar value.)
Explanation / Answer
Statement of Equivalent production Particulars Direct Materials %completion Equivalent mat Conversion %completion Equivalent Conv Total Costs Opening WIP 650.00 100% 650.00 650.00 100% 650.00 Units started and completed(3,800 -1,200) 2,600.00 100% 2,600.00 2,600.00 100% 2,600.00 Closing WIP 1,200.00 41% 492.00 1,200.00 22% 264.00 Equivalent Units 3,742.00 3,514.00 Opening WIP costs 1,950.00 536.00 Current Month Costs 22,600.00 13,200.00 Total costs 24,550.00 13,736.00 38,286.00 Cost per Equivalent units 6.56 3.91 Closing WIP Units 492.00 264.00 Cost of Closing WIP 3,227.85 1,031.96 4,259.81 goods transferred out 3,250.00 3,250.00 Cost of goods transferred Out 21,322.15 12,704.04 34,026.19
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