Materials are added at the beginning of the process. The ending work-in-process is 50% complete as to conversion costs. How would the total costs accounted for be distributed, using the weighted-average method?

Complete Question

Information for the month of January concerning Department A, the first stage of Ogden Corporation's production cycle, is as follows:

Materials

Conversion

BWIP

$ 8,000

$ 6,000

Current costs

40,000

32,000

Total costs

$ 48,000

$38,000

Equivalent units using weighted-average method

100,000

95,000

Average unit costs

$ 0.48

$ 0.40

Goods completed

90,000 units

EWIP

10,000 units

Materials are added at the beginning of the process. The ending work-in-process is 50% complete as to conversion costs. How would the total costs accounted for be distributed, using the weighted-average method?

Goods

Ending Work-

Completed

In-Process

A B C D

$88,000 $79,200 $86,000 $79,200

$6,800 $8,800 $0 $6,800

Solution

Completed goods

Materials (90,000 * $.48)

$43,200

Cost of completed goods

$79,200

Conversion costs (90,000 * $.40)

36,000

Given that EWIP is 50% complete as to conversion costs, 5,000 (10,000 * 50%) equivalent units of conversion cost are in ending inventory.

EWIP:

Materials (10,000 * $.48)

$ 4,800

Conversion costs (5,000 * $.40)

2,000

Cost of EWIP

$ 6,800