Miller Company manufactures a product for which materials are added at the beginning of the manufacturing process. A review of the company's inventory and cost records for the most recently completed year revealed the following information:
Units Materials Conversion
Work in process. Jan. 1 (80% complete with respect to conversion costs) 100,000 $100,000 $157,500
Units started into production 500,000
Costs added during the year:
Materials $650.00
Conversion $997.50
Units completed during the year 450,000
The company uses the weighted-average cost method in its process costing system. The ending inventory is 50% complete with respect to conversion costs.
Required:
i. Compute the equivalent units of production and the cost per equivalent units for materials and for conversion costs.
ii. Determine the cost transferred to finished goods.
iii. Determine the amount of cost that should be assigned to the ending work in process inventory.