Questions 35 of 7 Problem 32A Weighted average Cost per equi

Questions 3-5 (of 7) Problem 3-2A Weighted average: Cost per equivalent unit, costs assigned to products LO C2, C3 The following information spplies to the questions displeyed below) Victory Company uses weighted average process costing to eccount for its production costs Conversion cost is added evenly throughout the process Diret matertals are added at the beginning of the process During November, the company transferred 700.000 units of product to finished goods. At the end of November the work in process inventory consists of 180000 units that are 30% complete with respect to conversion Begnning inventory hed $420000 of drect matenals and $139.000 of conversion cost. The direa material cost added in Novermber is $2.220.000, and the conversion cost added is $3,254000 Begnning work in process cosisted of 60.000 units that were 100% complete with resped to drea materials and B0% compete with respect to conversion. Of the units completed 60.000 were fram beginning work in process and 640.000 units were started and completed during the penod References Section Break , obletti 3.2A Weighted egulvalent unit, costs sssigned to products average Cost per

Solution

Equivalent units of production (EUP)- weighted average method

Units

% Materials

EUP- Materials

% Labor

EUP- Labor

Units completed and transferred out

700,000

100%

700,000

100%

700,000

Ending goods in process - units

180,000

100%

180,000

30%

54,000

Total units

880,000

880,000

2

Cost per equivalent unit of production

Materials

Labor

Cost of beginning goods in process

$420,000

$139,000

Costs incurred this period

2,220,000

3,254,000

Total costs

Costs

$2,640,000

Costs

$3,393,000

÷ Equivalent units of production

EUP

880,000

EUP

754,000

Cost per equivalent unit of production (rounded to 2 decimals)

$3.00

$4.50

3

Cost of units transferred out:

EUP

Cost per EUP

Total cost

Direct materials

700,000

$3.00

2,100,000

Direct labor

700,000

$4.50

3,150,000

Total costs transferred out

$5,250,000

Costs of ending goods in process

EUP

Cost per EUP

Total cost

Direct materials

180,000

$3.00

540,000

Direct labor

54,000

$4.50

243,000

Total cost of ending goods in process

$783,000

Total costs accounted for

Equivalent units of production (EUP)- weighted average method
	Units	% Materials	EUP- Materials	% Labor	EUP- Labor
Units completed and transferred out	700,000	100%	700,000	100%	700,000
Ending goods in process - units	180,000	100%	180,000	30%	54,000
Total units	880,000		880,000		754,000
2
Cost per equivalent unit of production			Materials		Labor
Cost of beginning goods in process			$420,000		$139,000
Costs incurred this period			2,220,000		3,254,000
Total costs		Costs	$2,640,000	Costs	$3,393,000
÷ Equivalent units of production		EUP	880,000	EUP	754,000
Cost per equivalent unit of production (rounded to 2 decimals)	$3.00		$4.50
3
Cost of units transferred out:	EUP	Cost per EUP	Total cost
Direct materials	700,000	$3.00	2,100,000
Direct labor	700,000	$4.50	3,150,000
Total costs transferred out				$5,250,000
Costs of ending goods in process	EUP	Cost per EUP	Total cost
Direct materials	180,000	$3.00	540,000
Direct labor	54,000	$4.50	243,000
Total cost of ending goods in process				$783,000
Total costs accounted for				$6,033,000