Question

There are 3 blanks for this homework problem I do not know how to do. The quesetions are bolded with blanks and question marks.

Weighted Average Method, Unit Costs, Valuing Inventories

Byford Inc. produces a product that passes through two processes. During November, equivalent units were calculated using the weighted average method:

Units completed 196,000
Add: Units in EWIP X Fraction complete (60,000 X 40%) 24,000
Equivalent units of output (weighted average) 220,000
Less: Units in BWIP X Fraction complete (50,000 X 70%) 35,000
Equivalent units of output (FIFO) 185,000
The costs that Byford had to account for during the month of November were as follows:

BWIP $107,000
Costs added 993,000
Total $1,100,000
Required:

1. Using the weighted average method, determine unit cost.

per unit ___________??

2. Under the weighted average method, what is the total cost of units transferred out? What is the cost assigned to units in ending inventory?

Cost of units transferred out _____________??
Cost of ending inventory______________??

Answer 1

Answer and Explanation:

1. The computation of unit cots is shown below:-

Unit cost = Total cost ÷ Equivalent units of output

Cost of per unit = $1,100,000 ÷ 220,000

= $5

2. The computation of the total cost of units transferred out and cost assigned to units in ending inventory is shown below:-

                              Transfer Out       EWIP           Total

Cost accounted for:    

Goods transfer Out

(196,000 x $5)            $980,000                          $980,000

Goods EWIP

(24,000 x $5)                  0               $120,000      $120,000

Total Cost                    $980,000   $120,000       $1,100,000

EWIP = Ending work in process