Equivalent Units and Cost per Equivalent UnitWeighted-Average Method

Grand River Company produces a high-quality insulation material that passes through two production processes. Data for November for the first process follow:

CompletionCompletion

with Respectwith Respect

Units to materialsto Conversion

Work in process inventory, November 1 ...... 80,00050%25%

Work in process inventory, November 30.....60,00045%20%

Materials cost in work in process

Inventory, November 1 $76,600

Conversion cost in work in process

Inventory, November 1 $34,900

Units started into production 300,000

Units transferred to the next process 320,000

Materials cost added during November$410,000

Conversion cost added during November$234,500

Required:

1. Assume that the company uses the weighted-average method of accounting for units and costs. Determine the equivalent units for November for the first process.

300,000 (units started into production) + 80,000 (WIP, Nov.1) = 380,000

2. Compute the costs per equivalent unit for November for the first process.

3. Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process in November.

ACC2233 Hand-In Assignment 5 QUESTION ONE: Equivalent Units and Cost per Equivalent UnitWeighted-Average Method Grand River Company produces a high-quality insulation material that passes through two production processes. Data for November for the first process follow: Work in process inventory, November 1 ...... Work in process inventory, November 30..... Materials cost in work in process Inventory, November 1 Conversion cost in work in process Inventory, November 1 Units started into production Units transferred to the next process Materials cost added during November Conversion cost added during November Units Completion with Respect to materials 80,000 60,000 50% 45% Completion with Respect to Conversion 25% 20% $76,600 $34,900 300,000 320,000 $410,000 $234,500 Required: 1. Assume that the company uses the weighted-average method of accounting for units and costs. Determine the equivalent units for November for the first process. 2. Compute the costs per equivalent unit for November for the first process. 3. Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process in November. QUESTION TWO: Equivalent Units; Applying CostsWeighted-Average Method The Wire One Company manufactures high-quality coated electrical wire in two departments, Weaving and Coating. Materials are introduced at various points during work in the Weaving Department. After the weaving is completed, the materials are transferred into the Coating Department, where specialty plastic coating is applied. Selected data relating to the Weaving Department during May are given below: Production data: Kilograms in process, May 1: Materials 100% complete, conversion 80% complete .............................. Kilograms started into production during May................. Kilograms completed and transferred to Coating............ Kilograms in process, May 31: Materials 65% complete, conversion 30% complete ....................................... 85,000 365,000 ? 50,000 Cost data: Work in process inventory, May 1: Materials cost ................................................ Conversion cost.................................................. $101,000 $51,000 Cost added during May: Materials cost ................................................ Conversion cost ................................................ $462,000 $213,000 The company uses the weighted-average method. Required: 1. Compute the equivalent units of production. 2. Compute the costs per equivalent unit for May. 3. Determine the cost of ending work in process inventory and of the units Coating Department. transferred to the 4. Prepare a cost reconciliation between the costs determined in (3) above and the cost of beginning inventory and costs added during the period (May have a rounding difference)