For Salcido, Inc., the value of beginning Work in Process Inventory was $100,000, 25% of which was direct materials cost. During the period, Salcido completed work on 42,500 units, only completed 80% of the work on another 10,000 units, and incurred $80,000 in direct materials cost and $177,500 in conversion costs. Salcido adds direct materials at the beginning of their production process, and incurs conversion costs evenly throughout the process. Required:Calculate the following using the weighted average method for process costing.  a. Equivalent units for direct materials b. Equivalent units for conversion costs c. Cost per equivalent unit for direct materials d. Cost per equivalent unit for conversion costs e. Cost assigned to ending Work in Process Inventory f. Cost assigned

to goods completed and transferred out

What will be an ideal response?


a. 52,500 = (42,500 × 100%) + (10,000 × 100%)
b. 50,500 = (42,500 × 100%) + (10,000 × 80%)
c. $2.00 = [(25% × $100,000) + $80,000]/52,500
d. $5.00 = [(75% × $100,000) + $177,500]/50,500
e. $60,000 = ($2.00 × 10,000) + ($5.00 × 8,000)
f. $297,500 = ($2.00 + $5.00) × 42,500

Equivalent units = physical units × percentage of completion. Cost per equivalent unit = total manufacturing cost/equivalent units. Costs are assigned by multiplying the appropriate equivalent units by cost per equivalent unit.

Business

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