Plano Industries uses the weighted-average method in its process costing system.
ID: 2347332 • Letter: P
Question
Plano Industries uses the weighted-average method in its process costing system. The Assembly Department of Plano Industries reported the following information for the month of November. Units % complete with respect to Conversion Work in process, November 1 10,000 80% Units Started 28,000 Completed and transferred out 30,000 Work in process, November 30 8,000 30% Cost for November: Materials Conversion Work in process, November 1 $34,500 $48,600 Added during the month $146,000 $194,400 All materials are added at the beginning of the process. Required: Compute the following items using the weighted-average method: a. The equivalent units of production for materials. b. The cost per equivalent unit for conversion. c. The total cost assigned to units transferred out of the Assembly Department during November. d. The cost assigned to work in process inventory as of November 30.Explanation / Answer
a. The equivalent units of production for materials.
Materials Conversion
Units transferred out 30,000 30,000
WIP, Nov. 30
8,000 x 100% 8,000
8,000 x 30% 2,400
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Equi. units of production 38,000 32,400
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b. The cost per equivalent unit for conversion.
WIP, Nov. 1 $48,600
Current period cost $194,400
Total costs $243,000
Equivalent units 32,400
Cost per EU $7.50
c. The total cost assigned to units transferred out of the Assembly Department during November.
Materials
WIP, Nov. 1 $34,500
Current period cost $146,000
Total costs $180,500
Equivalent units 38,000
Cost per EU $4.75
Cost assigned to units transferred out
Materials 30,000 x $4.75 $142,500
Conversion 30,000 x $7.50 $225,000
Total cost assigned $367,500
d. The cost assigned to work in process inventory as of November 30
Materials 8,000 x $4.75 $38,000
Conversion 2,400 x $7.50 $18,000
Total cost assigned to WIP Nov. 30 $56,000