Question

Wit Company uses the weighted-average method in its process costing system. Information for the month of May concerning Department A, the first stage of the company's production process follows: Material costs are added at the beginning of the process. The ending work in process is 50% complete with respect to conversion costs. How would the costs be distributed? Goods completed and transferred out Ending work in proces

Answer 1

Answer:

Materials Conversion

Equivalent units of production

100,000 95,000

Cost per equivalent unit

$0.24 $0.20

Cost transferred out

$21,600 $18,000

Cost of ending work in process

$2,400 $1,000

Step-by-step explanation:

Computation of how Wit Company costs will be distributed

Materials Conversion

Transferred to next department

90,000 90,000

Ending work in process:

10,000 5,000

The production Equivalent units

100,000 95,000

Materials Conversion

Begining Work in process

4,000 3,000

Cost added during the month

20,000 16,000

Total cost $24,000 $19,000

÷Equivalent units

100,000 95,000

Cost per equivalent unit

$0.24 $0.20

Materials Conversion

TotalUnits transferred out

90,000 90,000

×Cost per equivalent unit $0.24$0.20

= Cost transferred out

$21,600 $18,000 =$39,600

Materials Conversion

Equivalent units of production:

Ending work in process

10,000 5,000

×Cost per equivalent unit$0.24$0.20

Cost of ending work in process

$2,400 $1,000 =$3,400

Calculation for Ending work in progress

Materials 10,000 units × 100%complete

=10,000

Conversion

10,000 units × 50% complete

=5,000

Calculation for Cost per equivalent unit

Total cost

Material $24,000

Conversion $19,000

÷ Equivalent units

Material 100,000

Conversion 95,000

=

Material $0.24

Conversion $0.20