Cost Information and the Weighted Average Method Morrison Company had the equiva

Question

Cost Information and the Weighted Average Method

Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown below.

Required:

1. Calculate the unit cost for December, using the weighted average method. Do NOT round interim calculations and, if required, round your answer to the nearest cent.
$  per equivalent unit

2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.

Cost of goods transferred out:

Reconciliation
Cost to account for:

3. What if you were asked to show that the weighted average unit cost for materials is the blend of the November unit materials cost and the December unit materials cost? The November unit materials cost is $3.47 ($66,000/19,000), and the December unit materials cost is $12.95 ($570,000/44,000). The equivalent units in BWIP are 19,000, and the FIFO equivalent units are 44,000. Calculate the weighted average unit materials cost using weights defined as the proportion of total units completed from each source (BWIP output and current output). Do NOT round interim calculations and, if required, round your answer to the nearest cent.
$  per unit

Direct Materials Conversion Costs Units completed 44,000 44,000 Add: Units in ending work in process ×      Percentage complete:         19,000 × 100% direct materials 19,000 —         19,000 × 45% conversion materials — 8,550 Eqivalent units of output 63,000 52,550 Costs:         Work in process, December 1:           Direct materials $66,000           Conversion costs 15,000           Total work in process $81,000         Current costs:           Direct materials $570,000           Conversion costs 185,000           Total current costs $755,000

Explanation / Answer

Cost of Prduction report (weighted avg method) ProductionDepartment Equivalent Units Flow Of Units Physical Units Pulping Conversion Cost Units accounnted for: Units completed (b) 44000 44000 44000 Ending work in progress inventory c (100% material and 45% conversion) 19000 19000 8550 Total units to be accounted for (f)      63000 63000 52550 Flow of Cost Cost in the begnning work in progress inventory 81000 66000 15000 cost added to process 755000 $570,000 $185,000 Total Cost to be accounted for (e)     836000 636000 200000 Cost per equivalent unit (a)     13.90 10.10 3.81 Cost accounted for Cost assigned to units transferred out (a*b) 611650 444190 167460 Cost in ending work in progress inventory (a*c)     224350 191810 32540 Total Cost accounted for    836000 636000 200000 $ Ans 1 Unit cost per equivalent units 13.90 ans 2 Units completed 611650 Cost of EWIP 224350 Total cost 836000 ans 3 Cost C Units % to total units U weighted avg cost C*U November unit materials cost is $3.47 19000 30.16 $1.05 December units material cost 12.95 44000 69.84 $9.04 63000 $10.1 So it is equal to what we calculated in cost production report $10.1

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