Homework 5 Solution - 8-25 Compute Costs per Equivalent...

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8-25 Compute Costs per Equivalent Unit Weighted-Average Method: Matsui Lubricants. Physical Units Equivalent Units Materials Eq. units Conversion Costs Eq. units Flow of units: Units to be accounted for: Beginning WIP inventory .................... 600 Units started this period ...................... 4,000 Total units to account for ................. 4,600 Units accounted for: Completed and transferred out a ......... 3,400 3,400 3,400 Units in ending inventory .................... 1,200 Materials (1,200 x 40%) .................. 480 Conversion costs (1,200 x 20%) ..... 240 Total units accounted for ................. 4,600 3,880 3,640 a 3,400 units transferred out = 4,600 units to account for 1,200 units in ending WIP inventory. Total Direct Materials Conversion Costs Flow of costs: Costs to be accounted for: Costs in beginning WIP inventory .......... $ 1,248 $ 976 $ 272 Current period costs .............................. 18,084 11,440 6,644 Total costs to be accounted for .......... $19,332 $12,416 $6,916 Cost per equivalent unit Materials ($12,416 ÷ 3,880 units) .......... $ 3.20 Conversion costs ($6,916 ÷ 3,640 units) $ 1.90
8-26 Assign Costs to Goods Transferred Out and Ending Inventory Weighted- Average Method: Matsui Lubricants. Total Direct Materials Conversion Costs Flow of costs: Costs to be accounted for: Costs in beginning WIP inventory .................. $ 1,248 $ 976 $ 272 Current period costs ...................................... 18,084 11,440 6,644 Total costs to be accounted for .................. $19,332 $12,416 $6,916 Cost per equivalent unit Materials ($12,416 ÷ 3,880 units) .................. $ 3.20 Conversion costs ($6,916 ÷ 3,640) ................ $ 1.90 Costs accounted for: Costs assigned to units transferred out $17,340 $10,880 a $6,460 b Cost of ending WIP inventory ........................ 1,992 1,536 c 456 d Total costs accounted for ........................... $19,332 $12,416 $6,916 Costs transferred out total $17,340, and costs in ending inventory total $1,992. a $10,880 = 3,400 EU x $3.20 per EU. b $6,460 = 3,400 EU x $1.90 per EU. c $1,536 = 480 EU x $3.20 per EU.

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