EXERCISE 4-2

Equivalent unit of production uses the weight- average method :

CLONEX LABS MATERIAL CONVERSION

Unit transferred to the next

190 000 190 000
department

Ending WIP :

Material :15 000 x 80% 12 000

Conversion :15 000 x 40% 6000

Equivalent unit of
202 000 196 000
production

EXERCISE 4-3

Cost per equivalent unit uses weight-average method for material, labor and overhead:

MATERIAL LABOR OVERHEAD

Cost of beginning
$ 18, 000 $ 5, 500 $ 27, 500
WIP

Cost added during the

$ 238, 900 $ 80, 300 $ 401, 500
period

Total cost $ 256, 900 $ 85, 800 $ 429, 000

Equivalent unit of
35 000 33 000 33 000
production

Cost per equivalent

$ 7. 34 $ 2. 60 $ 13. 00
unit
EXERCISE 4-4

Cost of ending WIP inventory & the units transferred out :

MATERIAL CONVERSION TOTAL

Ending WIP inventory:

Equivalent units of production 300 100

Cost per equivalent units $ 31. 56 $ 9. 32

Cost ending WIP inventory $ 9, 468 $ 932 $ 10, 400

Unit completed &

transferred out:

Units transferred to the next

1 300 1 300
department

Cost per equivalent unit $ 31. 56 $ 9. 32

Cost of units transferred out $ 41, 028 $ 12, 116 $ 53, 144
EXERCISE 4-5

Equivalent unit of production uses FIFO method:

MATERIAL CONVERSION

To complete beginning WIP:

Material: 400 x (100% - 75%) 100

Conversion: 400 x (100% - 25%) 300

Unit started during the period 42 600 42 600

Unit completed during the period 42 500 42 500

Ending WIP:

Material: 500 x 80% 400

Conversion: 500 x 30% 150

Equivalent units of production $ 85, 600 $ 85, 550

EXERCISE 4-6
Cost per equivalent unit = cost added during the period / equivalent units of production

MATERIAL LABOR OVERHEAD

$ 193, 320 / 27 000 $ 62, 000 / 25 000 $ 310, 000 / 25 000

$ 7. 16 $ 2. 48 $ 12. 40

EXERCISE 4-7

Cost of the unit transferred to the next department during the period and the cost of ending WIP:

ITEM MATERIAL CONVERSION TOTAL

Ending WIP inventory:

Equivalent unit of 2 800 2200

production
Cost per unit of $ 4. 40 $ 1. 30
production
Cost of ending WIP $ 12, 320 $ 2, 860 $ 15, 180
inventory

Unit transferred out:

Cost in beginning WIP $ 2, 700 $ 380 $ 3, 080
inventory
Cost to complete the
units in beginning WIP
inventory:
Equivalent units of $ 1, 400 $ 1, 700
production required to
complete the units in
beginning inventory
Cost per equivalent unit $ 4. 40 $ 1. 30
Cost complete the unit $ 6, 160 $ 2, 210 $ 8, 370
beginning inventory
Cost of unit started &
complete this period:
Unit started & complete 8000 8000
this period
Cost per equivalent unit $ 4. 40 $ 1. 30
Cost of unit started & $ 35, 200 $ 10, 400 $ 45, 600
complete this period
Total cost of unit $ 57, 050
transferred out