# Equivalent units in work in process ending from

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#Equivalent units in work in process, ending from Solution Exhibit 17-21, Step 2. 17-24 Weighted-average method, assigning costs. Bio Doc Corporation is a biotech company based in Milpitas. It makes a cancer-treatment drug in a single processing department. Direct materials are added at the start of the process. Conversion costs are added evenly during the process. Bio Doc uses the weighted average method of process costing. The following information for July 2011 is available. Equivalent Units Physical Direct Conversion Units Materials Costs Work in process, July 1 8,500a 8,500 1,700 Started during July 35,000 Completed and transferred out during July 33,000 33,000 33,000
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1. Calculate cost per equivalent unit for direct materials and conversion costs. 2. Summarize total costs to account for, and assign total costs to units completed (and transferred out) and to units in ending work in process Answer: 1. & 2. Solution Exhibit 17-24A shows equivalent units of work done to date for Bio Doc Corporation for direct materials and conversion costs. Solution Exhibit 17-24B summarizes total costs to account for, calculates the cost per equivalent unit of work done to date for direct materials and conversion costs, and assigns these costs to units completed and transferred out and to units in ending work-in-process inventory. SOLUTION EXHIBIT 17-24A Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units; Weighted-Average Method of Process Costing, Bio Doc Corporation for July 2011. (Step 2) (Step 1) Equivalent Units Physical Direct Conversion Flow of Production Units Materials Costs Work in process, beginning (given) 8,500 Started during current period (given) 35,000 To account for 43,500 Completed and transferred out during current period 33,000 33,000 33,000 Work in process, ending* (given) 10,500 10,500 100%; 10,500 60% 10,500 6,300 Accounted for 43,500 Equivalent units of work done to date 43,500 39,300 *Degree of completion: direct materials, 100%; conversion costs, 60%. SOLUTION EXHIBIT 17-24B Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit, and Assign Total Costs to Units Completed and to Units in Ending Work in Process; Weighted-Average Method of Process Costing, Bio Doc Corporation for July 2011. Total Production Costs Direct Materials Conversion Costs (Step 3) Work in process, beginning (given) \$108,610 \$ 63,100 \$ 45,510 Costs added in current period (given) 769,940 284,900 485,040 Total costs to account for \$878,550 \$348,000 \$530,550
8 (Step 4) Costs incurred to date \$348,000 \$530,550 Divide by equivalent units of work done to date (Solution Exhibit 17-24A) 43,500 39,300 Cost per equivalent unit of work done to date \$ 8.00 \$ 13.50 (Step 5) Assignment of costs: Completed and transferred out (33,000 units) \$709,500 (33,000* \$8.00) + (33,000* \$13.50) Work in process, ending (10,500 units) 169,050 (10,500\$8.00) + (6,300\$13.50) Total costs accounted for \$878,550 \$348,000 + \$530,550
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