Adventure Ltd produces top quality mountain bikes. In January 2021, the company had the following activities:

Direct materials are placed into production at the beginning of the process and conversion costs are incurred evenly throughout the process.

REQUIRED (show all your workings):

Prepare a Production Cost Worksheet using the weighted average method of costing including:

1. For each cost category, compute equivalent units. (3 marks)
2. For each cost category, summarise total costs in January and calculate the cost per equivalent unit. (3 marks) (round to two decimal places for Cost per EU)
3. Assign costs to units completed and to units ending WIP (5 marks).

Work in process, 1 January 2021 1 Units started during January 2021 Units completed during January 2021 Work in process, 31 January 2021 Cost of material in WIP (1 January 2021) Conversion costs in WIP (1 January 2021) Costs added during January: Direct material costs Conversion costs 500 units, 20% complete 800 units 900 units 400 units, 25% complete $390,000 $610,000 $2,000,000 $800,000 Work in process, 1 January 2021 1 Units started during January 2021 Units completed during January 2021 Work in process, 31 January 2021 Cost of material in WIP (1 January 2021) Conversion costs in WIP (1 January 2021) Costs added during January: Direct material costs Conversion costs 500 units, 20% complete 800 units 900 units 400 units, 25% complete $390,000 $610,000 $2,000,000 $800,000