Fifo weighted average method summary of total costs

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Unformatted text preview: accounted for: W ork in process, June 1 Cost added in Assembly Total cost Equivalent units Wang 2013 Materials Conversion $ 10,039 199,751 $ 6,119 118,621 $ 3,920 81,130 $ 209,790 $ 124,740 $ 85,050 5,940 5,670 38 Example: Weighted Average vs. FIFO • Weighted Average Method – Cost per equivalent unit: $124,740 ÷ 5,940 units = $21.00 $85,050 ÷ 5,670 units = $15.00 Total Cost Cost to be accounted for: W ork in process, June 1 Cost added in Assembly Total cost Materials Conversion $ 10,039 199,751 $ 6,119 118,621 $ 3,920 81,130 $ 209,790 $ 124,740 $ 85,050 Equivalent units Cost per equivalent unit 5,940 $ 21.00 5,670 $ 15.00 Cost per equivalent unit = $21.00 + $15.00 = $36.00 Wang 2013 39 Example: Weighted Average vs. FIFO • Weighted Average Method – Cost Reconciliation: Assembly Department Cost of Ending WIP Inventory and Units Transferred Out Materials Conversion Total Ending WIP inventory: Equivalent units 540 270 Cost per equivalent unit $ 21.00 $ 15.00 Cost of Ending WIP inventory $ 11,340 $ 4,050 $ 15,390 Units completed and transferred out: Units transferred 5,400 5,400 Cost per equivalent unit $ 21.00 $ 15.00 Cost of units transferred out $ 113,400 $ 81,000 $ 194,400 Wang 2013 40 Example: Weighted Average vs. FIFO • Weighted Average Method – Cost Reconciliation: Assembly Department Cost Reconciliation Costs to be accounted for: Cost of beginning Work in Process Inventory Costs added to production during the period Total cost to be accounted for Cost accounted for as follows: Cost of ending Work in Process Inventory Cost of units transferred out Total cost accounted for Wang 2013 $ $ $ $ 10,039 199,751 209,790 15,390 194,400 209,790 41 Example: Weighted Average vs. FIFO • FIFO Method Percent Completed Units Work in process, June 1 300 Units started into production in June 40% 20% 60% 30% 6,000 Units completed and transferred out of Department A during June Materials Conversion 5,400 Work in process, June 30 Wang 2013 900 42 Example: Weighted Average vs. FIFO • FIFO Method – Equivalent Units: Materials To complete beginning Work in Process: Materials: 300 units ×...
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This document was uploaded on 03/06/2014.

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