Greasy Nutritional Products, Inc. uses weighted-average process costing to accou
ID: 2537389 • Letter: G
Question
Greasy Nutritional Products, Inc. uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process, whereas direct materials are added at the beginning of the process.
During December, the company transferred 1,090,000 units of product to finished goods. The company started 950,000 units in December.
At the end of December, the work in process inventory consists of 670,000 units that are 20% complete with respect to conversion. Beginning inventory had $1,190,000 of direct materials and $780,000 of conversion cost. The direct material cost added in August is $1,412,000 and the conversion cost added is $1,010,000.
Beginning work in process consisted of 810,000 units that were 100% complete with respect to direct materials and 70% complete with respect to conversion. Of the units completed, 810,000 were from beginning work in process and 280,000 units were started and completed during the period.
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a. What were the total costs that were transferred out?
B. What were the total costs assigned to ending work in process inventory?
Explanation / Answer
Equivalent unit :
Cost per equivalent unit of material = (1190000+1412000)/1760000 = 1.4784 per unit
COst per equivalent unit of conversion = (780000+1010000)/1224000 = 1.4624 per unit
Cost of units transferred out = (1.4784+1.4624)*1090000 = 3205472
Cost of Ending work in process = (1.4784*670000)+(134000*1.4624) = 1186489
Physical unit % EUP-material % EUP-conversion Units transferred out 1090000 100% 1090000 100% 1090000 Ending work in process 670000 100% 670000 20% 134000 Total 1760000 1760000 1224000Related Questions
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