Exercise 4-2 Compute of Equivalent Units-Weight-Average Method

Clonex Labs, Inc. uses a process costing system. The following data are available for one
department for October.
percentage complete
units Materials Conversion
Work in process, October 1………….. 30,000 65% 30%
Work in process, October31…………. 15,000 80% 40%
The department started 175,000 units into production during the month and transferred 190,000
complete units to the next department.

Required :
Compute the equivalent units of production for October assuming that the company uses the
weighted-average method of accounting for units and costs.

Answer :

Clonex Labs, Inc. Materials Conversion

Units transferred to the next department 15,000 15,000
Ending work in process :
Materials : 15000x80% 12,000
Conversion : 15000x40% 6000
27,000 21,000
Exercise 4-3 Cost per equivalent unit-Weight-Average Method

Superior Micro Products uses the weighted-average method in its process costing system. Data
for the Assembly Department for May appear below :

Materials labor Overhead

Work in process, May 1 $18,000 $5,500 $27,500
Cost added during May $238,900 $80,000 $401,500
Equivalent units of production 35,000 33,000 33,000

Required :
Compute the cost per equivalent unit for materials, for labor, and for overhead.

Answer :
Superior Micro Products Materials Labor Overhead
Cost of beginning work in process inventory $ 18,000 $5,500 $27,500
Cost added during the period $238,900 $80,300 $401,500
Total Cost $256,900 $85,800 $429,000
Equivalent units of production 35,000 33,000 33,000
Cost per equivalent unit $7.34 $2.6 $13
Exercise 4-4 Applying Costs to Units-Weighted Average Method

Data concerning a recent period’s activity in the Prep Department, the first processing
department in a company that uses process costing, appear below :
Material Conversion
Equivalent units of production in ending work in process 300 100
Cost per equivalent unit $31.56 $9.32

A total of 1,300 units were completed and transferred to the next processing department during
the period.

Required :
Compute the cost of the units transferred to the next department during the period and the cost of
ending work in process inventory.
Prep Department
Costs of Ending Work in Process inventory and the Units Transferred Out
Materials Conversion Total
Ending Work in process inventory :
Equivalent units of production 300 100
Cost per equivalent unit $31.56 $9.32
$9,468 $932
$10,400
Units complete and transferred out :
Units transferred to the next department 1,300 1,300
Cost per equivalent unit $31.56 $9.32
Cost of units transferred $41,028 $12,116 $53,144

Exercise 4-5 Compute of Equivalent Units-FIFO Method

QualCon, Inc. produces wine bottles for vintners in a process that starts in the Melt and Mold
Department. Data concerning that department’s operations in the most recent period appear
below :
Beginning work in process :
Units in process 400
Stage of completion with respect to materials 75%
Stage of completion with respect to conversion 25%
Units started into production during the month 42,600
Units completed and transferred out 42,500
Ending work in process :
Units in process 500
Stage of completion with respect to materials 80%
Stage of completion with respect to conversion 30%
Required :
QualCon uses the FIFO method in its process costing system. Compute the equivalent units of
production for the period for the Melt and Mold Department.
Answer :
Materials Conversion
To complete beginning work in process
Materials :400x(100%-75%) 100
Conversion :400x(100%-25%) 300
Units started and complete during the period 100 100
Ending work in process :
Materials : 500x80% 400
Conversion : 500x30% 150
Equivalent units of production 600 550

Exercise 4-6Cost Per Equivalent Units-FIFO method

Superior Micro Products uses the FIFO method in its process costing system. Data for the
Assembly Department for May appear below :
Materials Labor Overhead
Cost added during May $193,320 $62,000 $310,000
Equivalent units of production 27,000 25,000 25,000

Required :
Compute the cost per equivalent unit for materials, labor, and overhead, and in total

Answer :
Superior Micro Product
Cost per Equivalent Unit-FIFO Method
Materials Labor Overhead
Cost added during the period $193,320 $62,000 $310,000
Equivalent units of production 27,000 25,000 25,000
Cost per equivalent unit $7.16 $2.48 $12.4

Exercise 4-7 Applying Cost to Units-FIFO Method

Answer :

Mixing Department
Costs of Ending Work in Process and Units Transferred Out-FIFO method
Materials Conversion Total
Ending Work in Process, inventory :
Equivalent Units of Production 800 200
$4.40 $1.30
$3520 $260 $3780
Units transferred out :
Cost in beginning Work in Process inventory $27,000 $380
Equivalent units of production required to complete the
beginning work in process inventory 400 700
Cost per Equivalent unit $4.40 $1.30
$1.760 $910 $2,670
Cost of Units started and Complete this period 8000 8000
$4.40 $1.30
$35,200 $10,400 $45,600

$52,050