Equivalent Units, Unit Cost, Valuation of Goods Transferred Out and Ending Work in Process

The blending department had the following data for the month of March:

Units in BWIP
Units completed	21,600
Units in EWIP (20% complete)	2,250
Total manufacturing costs	$94,815

1. What is the output in equivalent units for March? equivalent units

2. What is the unit manufacturing cost for March? Note: per unit

3. Compute the cost of goods transferred out for March.

4. value of March's EWIP?

Second question:

Goforth Company produces a product where all manufacturing inputs are applied uniformly. Goforth produced the following physical flow schedule for April:

Units to account for:
Units in BWIP (40% complete)	230,000
Units started	440,000
Total units to account for	670,000
Units accounted for:
Units completed:
From BWIP	230,000
Started and completed	290,400
	520,400
Units, EWIP (70% complete)	149,600
Total units accounted for	670,000

Goforth Company
Schedule of equivalent units
(Weighted Average Method)
Units completed
Units in ending work in process x fraction complete:
Equivalent units of output

Third Question:

Cassien Inc. manufactures products that pass through two or more processes. During June, equivalent units were computed using the weighted average method:

Units completed	77,000
Units in EWIP X Fraction complete (36,000 X 60%)	21,600
Equivalent units of output	98,600
June's costs to account for are as follows:
BWIP (10,000 units, 80% complete)	$50,000
Materials	98,000
Conversion costs	89,000
Total	$237,000

1. unit cost for June using the weighted average method. per unit

2. Using the weighted average method, determine the cost of EWIP and the cost of the goods transferred out.

Cost of ending work in process
Cost of the goods transferred out

3. Cassien had just finished implementing a series of measures designed to reduce the unit cost to $2.00 and was assured that this had been achieved and should be realized for June's production. Yet, upon seeing the unit cost for June, the president of the company was disappointed.

Cassien is using the weighted average method for calculating unit costs. Thus, the unit cost for June will be a mixture of May and June costs, and will not reflect the cost savings. Using FIFO for June would better reflect the effect of the cost reductions.Cassien is using the FIFO method for calculating unit costs. Thus, the unit cost for June will be a mixture of May and June costs, and will not reflect the cost savings. Using weighted average for June would better reflect the effect of the cost reductions.Cassien is using the LIFO method for calculating unit costs. Thus, the unit cost for June will be a mixture of May and June costs, and will not reflect the cost savings .Using weighted average for June would better reflect the effect of the cost reductions.Cassien is using the FIFO method for calculating unit costs. Thus, the unit cost for June will be a mixture of May and June costs, and will not reflect the cost savings Using LIFO for June would better reflect the effect of the cost reductions.

Byford Inc. produces a product that passes through two processes. During November, equivalent units were calculated using the weighted average method:

Units completed	200,000
Add: Units in EWIP X Fraction complete:
(56,000 X 30%)	16,800
Equivalent units of output (weighted average)	216,800
Less: Units in BWIP X Fraction complete:
(10,000 X 60%)	6,000
Equivalent units of output (FIFO)	210,800

The costs that Byford had to account for during the month of November were as follows:

Beginning work in process	$99,000
Costs added	919,960
Total	$1,018,960

1. Using the weighted average method, determine unit cost. Round to the nearest cent.

2. Under the weighted average method, what is the total cost of units transferred out? What is the cost assigned to units in ending inventory?

Cost of units transferred out	$fill in the blank 2
Cost of ending inventory	$fill in the blank 3

3. Bill Johnson, the manager of Byford, is considering switching from weighted average to FIFO. Explain the key differences between the two approaches and make a recommendation to Bill about which method should be used.

The weighted average method is

difficultsimple

to use than FIFO, but it does not reflect the unit cost as well if costs are changing significantly from one period to the next.

FIFOWeighted average

calculates the unit cost using only costs of the current period and output of the current period.

FIFOWeighted average

rolls back and picks up the costs and output in BWIP and counts them as if they belong to the current period. These costs and output of two periods are mixed. There is a significant difference in the unit cost of the prior period from the ,unit cost of the current period. If this type of cost fluctuation is typical, Byford should switch to

FIFOWeighted average

Drysdale Dairy produces a variety of dairy products. In Department 12, cream (transferred in from Department 6) and other materials (sugar and flavorings) are mixed at the beginning of the process and churned to make ice cream. The following data are for Department 12 for August:

Production:
Units in process, August 1, 20% complete*	40,000
Units completed and transferred out	110,000
Units in process, August 31, 50% complete*	30,000

*With respect to conversion costs.

1. physical flow schedule for the month.

Units to account for:
Units in beginning work in process
Units started
Total units to account for
Units accounted for:
Units transferred out
Units in ending work in process
Total units accounted for

2. Using the weighted average method, calculate equivalent units for the following categories: transferred-in, materials, and conversion.

Transferred-In	equivalent units
Materials	equivalent units
Conversion	equivalent units