Problem 4-13A Comprehensive Problem Weighted-Average Method [LO2, LO3, LO4, LO5]

Question

Problem 4-13A Comprehensive Problem Weighted-Average Method [LO2, LO3, LO4, LO5]

The PVC Company manufactures a high-quality plastic pipe that goes through three processing stages prior to completion.

Compute the costs per equivalent unit for the month. (Round your answers to 2 decimal places.)

Determine the cost of ending work in process inventory and of the units transferred out to the next department. (Round your intermediate calculation to 2 decimal places and final answers to the nearest whole dollar amount.)

Prepare a cost reconciliation report for the month. (Round your intermediate calculation to 2 decimal places and final answers to the nearest whole dollar amount.)

The PVC Company manufactures a high-quality plastic pipe that goes through three processing stages prior to completion.

Explanation / Answer

First we have to find out the pounds completed and transferred to next department . the formula is

= opening quantity in WIP + quantity in production – closing quantity in wip

= 70,000 + 350,000 – 40,000

= 380,000 pound

Now we will calculate equivalent units in production

now we will calculate costs per equivalent unit for the month

noe we will calculate cost of ending work in process inventory and of the units transferred out to the next department.

now we will calculate cost reconcilation

PVC company equivatent units of production Material Conversion units transferred to next department 380000 380000 Ending work in progress ( material 40000 x 75% , conversion 40000 X 25%) 30000 10000 Equivalent units of production 410000 390000

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