Varian Company uses the weighted average method for its process costing system. The Molding Department at Varian began the month of January with 80,000 units in Work in Process Inventory, all of which were completed and transferred out during January. An additional 90,000 units were started during the month, 30,000 of which were completed and transferred out during January. A total of 60,000 units remained in Work in Process Inventory at the end of January and were at varying levels of completion, as shown below.

Direct materials: 80 percent complete Direct labor: 90 percent complete Overhead: 90 percent complete The following cost information is for the Molding Department at Varian Company for the month of January:

Required

a. Determine the units to be accounted for and units accounted for; then calculate the equivalent units for direct materials, direct labor, and overhead. This requires performing step 1 of the four-step process.

b. Calculate the cost per equivalent unit for direct materials, direct labor, and overhead. This requires performing steps 2 and 3 of the four-step process.

c. Assign costs to units transferred out and to units in ending WIP Inventory. This requires performing step 4 of the four-step process.

d. Confirm that total costs to be accounted for (from step 2) equals total costs accounted for (from step 4). Note that minor differences may occur due to rounding the cost per equivalent unit in step 3.

e. Explain the meaning of equivalent units.

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Direct Direct Materials Labor Overhead Total Beginning WIP Inventory $1,400,000 $1,100,000 $1,700,000 $4,200,000 Incurred during the month 1,210,000 980,000 1,450,000 3,640,000