Question & Answer: Calculate Equivalent Units, Unit Costs, and Transferred Costs—Weighted Average Method…..

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:

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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

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