Question
Weighted Average Method, Unit Cost, Valuing Inventories Cassien Inc. manufactures products that pass through two or more processes. During June, equivalent units were computed using
-
Weighted Average Method, Unit Cost, Valuing Inventories
Cassien Inc. manufactures products that pass through two or more processes. During June, equivalent units were computed using the weighted average method:
Units completed 60,000 Units in EWIP X Fraction complete (36,000 X 60%) 21,600 Equivalent units of output 81,600 June's costs to account for are as follows: BWIP (10,000 units, 80% complete) $50,000 Materials 164,000 Conversion costs 43,000 Total $257,000
Required:
1. Calculate the unit cost for June using the weighted average method. Round your answer to the nearest cent. $fill in the blank 1 per unit
2. Using the weighted average method, determine the cost of EWIP and the cost of the goods transferred out. If required, round unit cost to the nearest cent in intermediate calculations and final answers to the nearest dollar.
Cost of ending work in process $fill in the blank 2 Cost of the goods transferred out $fill in the blank 3
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 Junes production. Yet, upon seeing the unit cost for June, the president of the company was disappointed. Can you explain why the full effect of the cost reductions may not show up in June? What can you suggest to overcome this problem?
Weighted Average Method, Unit Cost, Valuing Inventories
Cassien Inc. manufactures products that pass through two or more processes. During June, equivalent units were computed using the weighted average method:
| Units completed | 60,000 |
| Units in EWIP X Fraction complete (36,000 X 60%) | 21,600 |
| Equivalent units of output | 81,600 |
| June's costs to account for are as follows: | |
| BWIP (10,000 units, 80% complete) | $50,000 |
| Materials | 164,000 |
| Conversion costs | 43,000 |
| Total | $257,000 |
Required:
1. Calculate the unit cost for June using the weighted average method. Round your answer to the nearest cent. $fill in the blank 1 per unit
2. Using the weighted average method, determine the cost of EWIP and the cost of the goods transferred out. If required, round unit cost to the nearest cent in intermediate calculations and final answers to the nearest dollar.
| Cost of ending work in process | $fill in the blank 2 |
| Cost of the goods transferred out | $fill in the blank 3 |
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 Junes production. Yet, upon seeing the unit cost for June, the president of the company was disappointed. Can you explain why the full effect of the cost reductions may not show up in June? What can you suggest to overcome this problem?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Cornerstones of Managerial Accounting
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
6th edition
1305103963, 978-1305548909, 1305548906, 978-1305103962
