Weighted average method

Reconcile the Number of Physical Units:- Units started : 79,000 Beginning work in process : 46,000 Ending work in process : 85,000 Units to account for: Units to account for = Beginning WIP + Units started = 46 , 000 + 79 , 000 = 125 , 000 \text{Units to account for} = \text{Beginning WIP} + \text{Units started} = 46,000 + 79,000 = 125,000 Units accounted for: Units completed and transferred + Ending WIP = X + 85 , 000 \text{Units completed and transferred} + \text{Ending WIP} = X + 85,000 X + 85 , 000 = 125 , 000 ⟹ X = 125 , 000 − 85 , 000 = 40 , 000 X + 85,000 = 125,000 \implies X = 125,000 - 85,000 = 40,000 Calculate the Number of Equivalent Units:- Using the weighted-average method: Direct Materials: 100% for completed units + 59% for ending work in process Conversion Costs: 100% for completed units + 59% for ending work in process Equivalent Units for Direct Materials: 40 , 000 + ( 85 , 000 × 59 % ) 40,000 + (85,000 \times 59\%) 40 , 000 + 50 , 150 = 90 , 150 40,000 + 50,150 = 90,150 Equivalent Units for Conversion Costs: 40 , 000 + ( 85 , 000 × 59 % ) 40,000 + (85,000 \times 59\%) 40 , 000 + 50 , 150 = 90 , 150 40,000 + 50,150 = 90,150 Equivalent Units of Production (EUP) for Direct Materials = 90,150 units Equivalent Units of Production (EUP) for Conversion Costs = 90,15 Calculate the Cost per Equivalent Unit:- Total cost: Direct Materials : $ 45 , 000 + $ 94 , 000 = $ 139 , 000 \$45,000 + \$94,000 = \$139,000 $45 , 000 + $94 , 000 = $139 , 000 Conversion Costs : $ 87 , 000 + $ 149 , 000 = $ 236 , 000 \$87,000 + \$149,000 = \$236,000 $87 , 000 + $149 , 000 = $236 , 000 Cost per equivalent unit: Direct Materials : Cost per equivalent unit = Total cost Equivalent units = 139 , 000 90 , 150 ≈ 1.5411 \text{Cost per equivalent unit} = \frac{\text{Total cost}}{\text{Equivalent units}} = \frac{139,000}{90,150} \approx 1.5411 Conversion Costs : Cost per equivalent unit = Total cost Equivalent units = 236 , 000 90 , 150 ≈ 2.6153 \text{Cost per equivalent unit} = \frac{\text{Total cost}}{\text{Equivalent units}} = \frac{236,000}{90,150} \approx 2.6153 Reconcile the Total Cost of Work in Process:- Calculate the total cost of units completed and ending inventory: Units Completed : Direct Materials = 40 , 000 × 1.5411 = 61 , 644 \text{Direct Materials} = 40,000 \times 1.5411 = 61,644 Conversion Costs = 40 , 000 × 2.6153 = 104 , 612 \text{Conversion Costs} = 40,000 \times 2.6153 = 104,612 Total = 61 , 644 + 104 , 612 = 166 , 256 \text{Total} = 61,644 + 104,612 = 166,256 Ending Inventory : Direct Materials = 50 , 150 × 1.5411 = 77 , 274 \text{Direct Materials} = 50,150 \times 1.5411 = 77,274 Conversion Costs = 50 , 150 × 2.6153 = 131 , 165 \text{Conversion Costs} = 50,150 \times 2.6153 = 131,165 Total = 77 , 274 + 131 , 165 = 208 , 439 \text{Total} = 77,274 + 131,165 = 208,439 Total cost accounted for: Units completed and transferred + Ending Inventory = 166 , 256 + 208 , 439 = 374 , 695 \text{Units completed and transferred} + \text{Ending Inventory} = 166,256 + 208,439 = 374,695 Final Values

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Accounting

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