The Matsui Lubricants plant uses the weighted-average method to account for its

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:

Quantity information is obtained from the manufacturing records and includes the following:

Beginning WIP inventory Direct materials $ 976 Conversion costs 272 Current period costs Direct materials 11,440 Conversion costs 6,644 Required: (1) Compute the equivalent units for the materials and conversion cost calculations. Answer is complete but not entirely correct 3,400 Equivalent units for materials Equivalent units for conversion costs 240 (2) Compute the cost per equivalent unit for direct materials and conversion costs. ( Answer is complete and correct. Cost Per Equivalent Unit Materials Conversion costs 3.20 1.90

Explanation / Answer

Units transferred=600+4000-1200= 3400 1 Equivalent units for materials=3400+(1200*40%)=3880 Equivalent units for conversion costs=3400+(1200*20%)=3640 2 Cost per equivalent unit Materials 3.2 =(976+11440)/3880 Conversion 1.9 =(272+6644)/3640

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