PROBLEM SET B Problem 20-1B Weighted average: Cost per equivalent unit; costs assigned to products P1 Abraham Company uses weighted average process costing to account for its production costs. The company has two production processes. Conversion is added evenly throughout each process. Direct materials are added at the beginning of the first process. Additional information for the first process follows. Beginning work in process inventory Direct materials. $ 58,000 Conversion .... 86,400 $ 144,400 Costs added this period Direct materials 712,000 Conversion ..... 1,980,000 2,692,000 Total costs to account for..... $2,836,400 Direct Materials Conversion Units Percent Complete Percent Complete 2,000 100% 85% 86,000 80,000 8,000 100% 25% Beginning work in process inventory... Units started this period. Units completed and transferred out... Ending work in process inventory.... Required 1. Compute the equivalent units of production for both direct materials and conversion. 2. Compute cost per equivalent unit of production for both direct materials and conversion. 3. Assign costs to the department's output-specifically, to the units transferred out and to the units in ending work in process inventory. Check (2) Conversion cost per equivalent unit, $25.20 Analysis Component 4. Assume that an error is made in determining the percent complete for units in ending inventory in the first process. Instead of being 25% complete for conversion, they are actually 75% complete. Write a one-half-page memo to the plant manager describing how this error affects this period's financial statements