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:
Line Item Description | Units |
---|---|
Units completed | 81,000 |
Units in EWIP X Fraction complete (36,000 X 60%) | 21,600 |
Equivalent units of output | 102,600 |
June's costs to account for are as follows: | |
BWIP (10,000 units, 80% complete) | $50,000 |
Materials | 96,000 |
Conversion costs | 82,000 |
Total | $228,000 |
Required:
1. Calculate the unit cost for June using the weighted average method. Round your answer to the nearest cent. fill in the blank 1 of 1$ 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.
Line Item Description | Amount |
---|---|
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 June's 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?
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./ or
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./ or
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./ or
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./
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