The next twe questions are based on the following: Aviary Company manufactures a

Question

The next twe questions are based on the following: Aviary Company manufactures an industrial plastic compound. The company uses the weighted-average method in its process costing system. For the company's first processing department, the June I work in process inventory consisted of 24.600 units with $45.600 in materials cost and S67.800 in conversion cost. The June l workin process inventory was 40% complete with respect to materials and 30% complete with respect to conversion. During June, 20,800 units were started into production and S41,592 in materials cost and $37,592 in conv i cost were added in the month. Ihe June 30 inventory consisted of 19,400 units that were 80% complete with respect to materials and 60% complete with respect to conversion. 1 Compute the department's cost of ending working process inventory A. S 192,584 B. $ 54600 C. S D. S65.184 E. None of the above. 32.592 2 Compute the department's cost of units transferred out to the next department A. S381.481 B. S C. s127.400 D. 5 E. None of the above. 54,600 72.800

Explanation / Answer

Equivalent unit of material = 26000+(19400*80%) = 41520 units

Equivalent unit of conversion = 26000+(19400*60%) = 37640 units

Cost per equivalent unit of material = (45600+41592)/41520 = 2.1 per unit

Cost per equivalent unit of conversion = (67800+37592)/37640 = 2.8 per unit

Cost of ending work in process = (15520*2.1+11640*2.8) = 65184

so answer is d) $65184

Cost of units transferred out = (2.1+2.8)*26000 = 127400

so answer is c) $127400

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