# Question & Answer: Equivalent Units and Product Cost Report—Weighted Average Method…..

Equivalent Units and Product Cost Report—Weighted Average Method

The following data (and annotations) for March 2016 are for the work in process account of the first of Olympus Company’s four departments used in manufacturing its only product.

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Question & Answer: Equivalent Units and Product Cost Report—Weighted Average Method…..
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Work in Process-Department 1
Beginning balance (3,000 units, 40% complete)
Direct material \$25,200
Conversion costs 8,400
Transferred to department 2 (23,000 units) (a)
Direct material (24,000 units) 192,000
Direct labor 115,950
Ending balance [ (b) units, 25% complete] (c)

Assuming that Olympus uses the weighted average method and that materials are added at the beginning of the process and conversion costs are incurred evenly throughout, solve for the three missing numbers

Round average cost per equivalent unit to four decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number.

Olympus Company Department 1
Equivalent Units Calculations, March 2016
Equivalent Units
% Work
done
Direct
Materials
% Work
Done
Conversion
Costs
Product Cost Report
Direct
Materials
Conversion
Costs
Average cost / Equivalent unit (round four decimal places) \$Answer \$Answer
Complete / Transferred:
Cost of Goods Manufactured \$Answer a.
Ending Inventory:
Cost of Ending Inventory \$Answer c.
Total Costs Allocated \$Answer

 Statement of Equivalent production Particulars Direct Materials %completion Equivalent mat Conversion %completion Equivalent Conv Total Opening WIP 3,000.00 100% 3,000.00 3,000.00 100% 3,000.00 Units started and completed=23000 – 3000 20,000.00 100% 20,000.00 20,000.00 100% 20,000.00 ending WIP = 24000 – 20000 4,000.00 100% 4,000.00 4,000.00 25% 1,000.00 Equivalent Units 27,000.00 24,000.00 Opening WIP Costs 25,200.00 8,400.00 33,600.00 Current Month Costs 192,000.00 189,350.00 381,350.00 Total costs 217,200.00 197,750.00 414,950.00 Cost per Equivalent units 8.04 8.24 Ending WIP Units 4,000.00 1,000.00 Cost of Ending WIP 32,177.78 8,239.58 40,417.36 Units completed and transferred out 23,000.00 23,000.00 Cost of Units completed and transferred out 185,022.22 189,510.42 374,532.64 Product Cost Report Direct Conversion Materials Costs Beginning Inventory 3,000.00 25,200.00 8,400.00 Current 24,000.00 192,000.00 189,350.00 Total Costs to Account For 217,200.00 197,750.00 ÷ Total Equivalent Units 27,000.00 24,000.00 Average cost / Equivalent unit (round four decimal places) 8.04 8.24 Complete / Transferred: Direct Materials 185,022.22 Conversion costs 189,510.42 Cost of Goods Manufactured 374,532.64 Ending Inventory: Direct Materials 32,177.78 Conversion costs 8,239.58 Cost of Ending Inventory 40,417.36 Total Costs Allocated 414,950.00