Question

Bellevue Chemicals had beginning work-in-process inventory of $254,765 on March 1. Of this amount, $102,210 was the cost of direct materials and $152,555 was the cost of conversion. The 24,320 units in the beginning inventory were 45 percent complete with respect to direct materials and 65 percent complete with respect to conversion costs.

During March, 58,480 units were transferred out and 15,600 remained in ending inventory. The units in ending inventory were 70 percent complete with respect to direct materials and 15 percent complete with respect to conversion costs. Costs incurred during March amounted to $952,670 for direct materials and $1,057,763 for conversion.
Compute the costs of goods transferred out and the ending inventory for March using the weighted-average method.

Answer 1

The costs of goods transferred out for March using the weighted-average method is $1,217,759 and the ending inventory for March is $205,840.

Step-by-step explanation:

For direct materials, the equivalent units in the beginning WIP inventory can be calculated as the total units in the beginning inventory (24,320) multiplied by the percentage of completion for direct materials (45%). This gives us 10,944 equivalent units for direct materials in the beginning WIP inventory.

For direct materials, this is simply the units completed during March (58,480) multiplied by the percentage of completion for direct materials (100%). This gives us 58,480 equivalent units for direct materials for the units completed during March. For conversion costs, this is the units completed during March (58,480) multiplied by the percentage of completion for conversion costs (100%). This also gives us 58,480 equivalent units for conversion costs for the units completed during March.

For conversion costs, this is the units in ending inventory (15,600) multiplied by the percentage of completion for conversion costs (15%). This gives us 2,340 equivalent units for conversion costs in the ending inventory.

The costs for direct materials transferred out is the sum of the costs incurred during March ($952,670) and the costs in the beginning WIP inventory ($102,210), divided by the total equivalent units for direct materials (10,944 + 58,480 + 10,920). This gives us a total cost of $15.49 per equivalent unit for direct materials. Multiplying this by the equivalent units for direct materials in the ending inventory (10,920) gives us a cost of $169,336 for direct materials in the ending inventory.

The costs for conversion transferred out is the sum of the costs incurred during March ($1,057,763) and the costs in the beginning WIP inventory ($152,555), divided by the total equivalent units for conversion costs (15,808 + 58,480 + 2,340). This gives us a total cost of $15.60 per equivalent unit for conversion costs. Multiplying this by the equivalent units for conversion costs in the ending inventory (2,340) gives us a cost of $36,504 for conversion costs in the ending inventory.

Therefore, the costs of goods transferred out for March using the weighted-average method is $1,217,759 and the ending inventory for March is $205,840.