1. Assigning Costs to Products: Weighted Average Method. Jennings Company uses the weighted average method for its process costing system. The Molding department at Jennings began 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 in the following:

Direct materials	80 percent complete
Direct labor	90 percent complete
Overhead	90 percent complete

The following cost information is for the Molding department at Jennings Company for the month of January:

	Direct Materials	Direct 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

Required:

1. Determine the units to be accounted for and units accounted for; then calculate the equivalent units for direct materials, direct labor, and overhead. (Hint: this requires performing step 1 of the four-step process.) (2)

The unit to be accounted for is 170,000

Reconciliation of Units
A	Opening WIP	80,000
B	Introduced	90,000
C=A+B	Units to be accounted for	170,000
D	Transferred	110,000
E=C-D	Closing WIP	60,000

Statement of Equivalent Units
		Material	Labor	Overhead
	Units	Complete %	Equivalent units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	110,000.00	100%	110000	100%	110000	100%	110000
Closing WIP	60,000	80%	48,000	90%	54,000	90%	54,000
Total	170,000	Total	158,000	Total	164,000	Total	164,000

1. Calculate the cost per equivalent unit for direct materials, direct labor, and overhead. (Hint: this requires performing step 2 and step 3 of the four-step process.) (2)

Material	Labor	Overhead
158,000	164,000	164,000

1. Assign costs to units transferred out and to units in ending WIP inventory. (Hint: this requires performing step 4 of the four-step process.) (2) Transfer out is 110,000 and ending WIP 60,000
2. Confirm that total costs to be accounted for (from step 2) equal total costs accounted for (from step 4). Note that minor differences may occur due to rounding the cost per equivalent unit in step 3. (2)
3. Explain the meaning of equivalent units. (2)
4. Prepare a production cost report for Jennings Company for the month of January (2)