EXERCISE 411 Equivalent Units and Cost per Equivalent UnitWeighted-Average Method [LO2, LO3, LO4]

Solex Company produces a high-quality insulation material that passes through two production processes. Data for June for t Units Work in process Inventory June-1 Work in process Inventory June-30 Material cost in work in process inventory, June 1 Conversion cost in work in process inventory, June 1 Units started into production Units transferred to next process Material cost added during june Conversion cost added during June Completion with respect to materials 60,000 75% 40,000 50%

280,000 300,000

Required: 1 Assume that the company uses the weighted-average method of accounting for units and costs. Determine the eq 2 Compute the costs per equivalent unit for June for the first process. 3 Determine the total cost of ending work in process inventory and the total cost of units transferred to the next pr

Equivalent Units of Production = units Transferred to next department + Ending work in process
Material Equivalent units of production Unit transferred to next department Ending Work in process (M -50% x 40,000 and C-25% x40,000) Equivalent units of production 300,000 20000 320,000

Cost per equivalent units of production = Total cost/equivalent units of production Totl cost = Cost of beginning work in process + Cost added during the period
Material Cost per equivalent unit Cost of beginning work in process 56,600 385,000 441,600 1.38

Cost added during the period

Total cost Cost per equivalent unit

Cost of Ending WIP = cost of equivalent unit X ending work in process inventory
Material Ending Work in process (M -50% x 40,000 and C-25% x40,000) Cost per equivalent unit Cost of Ending WIP 20000 1.38 27600

Cost of units transferred = cost of equivalent unit X units completed and transferred
Material Unit transferred to next department Cost per equivalent unit Cost of units transferred 300,000 1.38 414000

LO2, LO3, LO4]

ion processes. Data for June for the first process follow: (Garrison 161) Completion with respect to conversion 40% 25% 56,600 14,900 Cost

385,000 214,500

units and costs. Determine the equivalent units for June for the first process.

of units transferred to the next process in June.

t + Ending work in process

Conversion 300,000 10000 310,000 Total

f production
Conversion 14,900 214,500 229,400 0.74

s inventory
Conversion 10000 0.74 7400

35000

nd transferred
Conversion 300,000 0.74 222000

636000