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

Exercise 42

Weighted-Average Method Cuevas Company manufactures a single product that goes through two processes, mixing and cooking. These data pertain to the mixing department for August:

Work-in-process inventory, August 1
Conversion: 80 percent complete	33,000 units
Work-in-process inventory, August 31
Conversion: 40 percent complete	27,000 units
Units started into production	54,000
Units completed and transferred out	?
Costs
Work-in-process inventory, August 1
Material X	$ 64,800
Material Y	89,100
Conversion	119,880
Costs added during August
Material X	152,700
Material Y	135,900
Conversion	304,920

Material X is added at the beginning of work in the mixing department. Material Y is also added in the mixing department, but not until product units are 60 percent complete with regard to conversion. Conversion costs are incurred uniformly during the process. The company uses the weighted-average cost method.

Required

1. Calculate equivalent units of material X, material Y, and conversion for the mixing department.

2. Calculate costs per equivalent unit for material X, material Y, and conversion.

3. Calculate the cost of units transferred out.

4. Calculate the cost of ending work-in-process inventory.

Step 1 of 5

(1) Calculate the equivalent units of material X, material Y and conversion for the mixing department:

In order to calculate the equivalent units, first prepare the quantity schedule. This quantity schedule reconciles the total number of units be accounted for and the number of units accounted.

Prepare the quantity schedule as below:

Quantity Schedule
Input:
Beginning work in process	33,000
Units started into production	54,000
Total units to be accounted for	87,000
Output:
Units completed and transferred out	60,000
Ending work in process	27,000
Total units accounted for	87,000