QUESTION ONE: Equivalent Units and Cost per Equivalent Unit-Weighted-Average Met

Question

QUESTION ONE: Equivalent Units and Cost per Equivalent Unit-Weighted-Average Method Grand River Company produces a high-quality insulation material that passes through two production processes. Data for November for the first process follow: Completion with Respect Completion with Respect to Conversion Units to materials Work in process inventory, November 1.... Work in process inventory, November 30 80,000 60,000 50% 45% 25% 20% Materials cost in work in process Inventory, November1 Conversion cost in work in process Inventory, November 1 Units started into production Units transferred to the next process Materials cost added during November Conversion cost added during November $76,600 $34,900 300,000 320,000 $410,000 $234,500 Required: 1. Assume that the company uses the weighted-average method of accounting for units and costs. Determine the equivalent units for November for the first process. 2. Compute the costs per equivalent unit for November for the first process. 3. Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process in November. + 10

Explanation / Answer

Equivalent Units statement Material Conversion Units Input Particulars Units Output Equivalent units % complete Equivalent units % complete 80000 Opening WIP 300000 Input Finished Goods 320000 320000 100% 320000 100% Closing WIP 60000 27000 45% 12000 20% 380000 380000 347000 332000 Statement Showing cost per unit Cost of Opening WIP Current Cost Total Equivalent units Cost per unit Material 76600 410000 486600 347000 1.4 Conversion 34900 234500 269400 332000 0.81 Cost per unit $2.21 per unit Cost of production summary Total cost of Completed Goods 707,200 (320,000units@2.21 per unit) Cost of Closing WIP 47520 Material (27,000@1.40 per unit) 37800 Conversion(12,000@0.81 per unit) 9720

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