Materials are added at the beginning of the process. The ending work-in-process is 50% complete as to conversion costs. How would the total costs accounted for be distributed, using the weighted-average method?

Complete Question

Information for the month of January concerning Department A, the first stage of Ogden Corporation's production cycle, is as follows:

Materials

Conversion

BWIP

$ 8,000

$ 6,000

Current costs

40,000

32,000

Total costs

$ 48,000

$38,000

Equivalent units using weighted-average method

100,000

95,000

Average unit costs            

$ 0.48

$ 0.40

Goods completed

90,000 units

EWIP

10,000 units

Materials are added at the beginning of the process. The ending work-in-process is 50% complete as to conversion costs. How would the total costs accounted for be distributed, using the weighted-average method?

Goods

Ending Work-

Completed

In-Process

A                              B                       C                   D

$88,000                 $79,200         $86,000       $79,200

$6,800                  $8,800             $0               $6,800

       Solution

Completed goods

Materials (90,000 × $.48)

$43,200

Cost of completed goods

$79,200

Conversion costs (90,000 × $.40)

36,000

Given that EWIP is 50% complete as to conversion costs, 5,000 (10,000 × 50%) equivalent units of conversion cost are in ending inventory.

EWIP:

Materials (10,000 × $.48)

$ 4,800

Conversion costs (5,000 × $.40)

2,000

Cost of EWIP

$ 6,800

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