USA: +1 (725) 712-1730 
Sign in
Calculate Equivalent Units, Unit Costs, and Transferred Costs—Weighted Average Method
Godfrey Manufacturing, Inc., operates a plant that produces its own regionally-marketed Spicy Steak Sauce. The sauce is produced in two processes, blending and bottling. In the Blending
Department, all materials are added at the start of the process, and labor and overhead are incurred evenly throughout the process. Godfrey uses the weighted average method. The following data from the Work in Process—Blending Department account for January 2016 is missing a few items:
| Work in Process-Blending Department | |
|---|---|
| January 1 inventory (5,000 gallons, 60% processed) | |
| Direct material | $18,000 |
| Conversion costs | 8,850 |
| Transferred to Bottling Department (60,000 gallons) | |
| January charges: | |
| Direct material (61,000 gallons) | 228,750 |
| Direct labor | 110,400 |
| Manufacturing overhead | 73,200 |
| January 31 inventory [ ? gallons, 70% processed] | |
Required
Assuming Godfrey uses the weighted average method in process costing, calculate the following amounts for the Blending Department:
Number of units in the January 31 inventory.
Equivalent units for materials and conversion costs.
January cost per equivalent unit for materials and conversion costs.
Cost of the units transferred to the Bottling Department.
Cost of the incomplete units in the January 31 inventory.
Round average cost per equivalent unit to four decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number.
| Godfrey Manufacturing,Inc. Blending Department Flow of Units and Equivalent Units Calculation, January 2016 |
||||||
|---|---|---|---|---|---|---|
| Equivalent Units | ||||||
| % Work done |
Direct Materials |
% Work Done |
Conversion Costs |
|||
| Complete/Transferred | Answer | Answer % | Answer | Answer % | Answer | |
| Ending Inventory | a. Answer | Answer % | Answer | Answer % | Answer | |
| Total | Answer | b. | Answer | Answer | b. | |
| Product Cost Report | ||||||
|---|---|---|---|---|---|---|
| Direct Materials |
Conversion Costs |
|||||
| Beginning Inventory | $Answer | $Answer | $Answer | |||
| Current | Answer | Answer | Answer | |||
| Total Costs to Account For | $Answer | $Answer | $Answer | |||
| ÷ Total Equivalent Units | Answer | Answer | ||||
| Average cost / Equivalent unit (round four decimal places) | $Answer | c. | $Answer | c. | ||
| Complete / Transferred: | ||||||
| Direct Materials | $Answer | |||||
| Conversion costs | Answer | |||||
| Cost of Goods Manufactured | $Answer | d. | ||||
| Ending Inventory: | ||||||
| Direct Materials | $Answer | |||||
| Conversion costs | Answer | |||||
| Cost of Ending Inventory | $Answer | e. | ||||
| Total Costs Allocated | $Answer | |||||
Expert Answer
1. No of ending units work in process= (5000+61000-60000)=6000 Units
2. CALCULATE EQUIVALENT UNIT :
| WHOLE UNIT | % | MATERIAL | % | CONVERSION COST | |
| Unit completed and transfered out | 60000 | 100% | 60000 | 100% | 60000 |
| Ending work in process | 6000 | 100% | 6000 | 70% | 4200 |
| Total | 66000 | 64200 | |||
CALCULATE COST PER EQUIVALENT UNIT :
| MATERIAL | CONVERSION COST | |
| Beginning work in process | 18000 | 8850 |
| Cost added during period | 228750 | 183600 |
| Total cost | 246750 | 192450 |
| Equivalent unit | 66000 | 64200 |
| Cost per equivalent unit | 3.7386 | 2.9977 |
Cost of units transfered to bottling department and ending unit :
| Completed and transfered | |
| Direct material | 224316 |
| Conversion cost | 179862 |
| Cost of goods manufactured | 404178 |
| Ending inventory | |
| Direct material | 22432 |
| Conversion cost | 12590 |
| Cost of ending inventory | 35022 |
| Total cost allocated | 439200 |
