Question

Refer to the information for Alfombra Inc. below.

The owner of Alfombra insisted on a formal report that provided all the details of the weighted average method.

In the manufacturing process, all materials are added uniformly throughout the process.

Required: Prepare a production report for the bath linens department for August using the weighted average method.

Alfombra Inc. manufactures throw rugs. The throw rugs department weaves cloth and yarn into throw rugs of various sizes.

Alfombra uses the weighted average method. Materials are added uniformly throughout the weaving process.

In August, Alfombra switched from FIFO to the weighted average method. The following data are for the throw-rug department for August:

Production: Units in process, August 1, 60 percent complete 50,000 Units completed and transferred out 150,000 Units in process, August 31, 60 percent complete 50,000 Costs: WIP, August 1 $180,000 Current costs 756,000 Total $936,000

Answer 1

cost to be accounted for:

beginning cost: 180,000

added cost 756,000

total cost 936,000

cost accounted for:

ending WIP 30,000 x 5.2 = 156,000

trasnsferred-out: 150,000 x 5.2 = 780,000

total cost accounted for 936,000

Step-by-step explanation:

150,000 completed

50,000 at 60%

weighted average equivalent unit:

complete + percetage of completion ending WIP

150,000 + 50,000 x 60% = 180,000

Cost per unit:

936,000 / 180,000 = 5.2 dollar per unit

we should match the total cost pool with the ending WIP and trasnferred out units