Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 52

Weighted-Average Method; Two Departments Allgood, Inc., an automotive exhaust system manufacturer, has two departments in muffler production, the fabrication and the assembly departments.

All materials for the fabrication department were added at the beginning of the process. Data recorded for January follow:

	Units	Percent Completed	Direct Materials	Conversion
Fabrication department
Work-in-process inventory, January 1	6,000	20%	$ 15,000	$ 20,000
Transferred to assembly department in January	50,000
Work-in-process inventory, January 31	4,000	40%
Assembly department
Work-in-process inventory, January 1 (transferred-in cost: $92,000)	10,000	40		$200,000
Completed and transferred out in January	55,000
Work-in-process inventory, January 31	5,000	40
Costs incurred in January
Fabrication department			$117,500	$310,850
Assembly department				$723,400

Required Calculate the following using the weighted-average method:

1. Equivalent units of direct materials and conversion in the fabrication department.

2. Unit costs of direct materials and conversion in the fabrication department.

3. Cost of goods transferred to the assembly department from the fabrication department in the month of January.

4. Cost of the work-in-process ending inventory in the fabrication department.

5. Equivalent units of transferred-in and conversion in the assembly department.

6. Unit costs of transferred-in and conversion in the assembly department.

7. Cost of goods transferred to finished goods from the assembly department in January.

8. Cost of the work-in-process ending inventory in the assembly department.

Step 1 of 8

1.?54,000; 51,600