Equivalent Units and Cost per Equivalent Unit-Weighted-Average Method
Grand River Company produces a high-quality insulation material that passes through two production processes. Data for November for the first process follow:
CompletionCompletion
with Respectwith Respect
Units to materialsto Conversion
Work in process inventory, November 1 ...... 80,00050%25%
Work in process inventory, November 30.....60,00045%20%
Materials cost in work in process
Inventory, November 1 $76,600
Conversion cost in work in process
Inventory, November 1 $34,900
Units started into production 300,000
Units transferred to the next process 320,000
Materials cost added during November$410,000
Conversion cost added during November$234,500
Required:
1. Assume that the company uses the weighted-average method of accounting for units and costs. Determine the equivalent units for November for the first process.
300,000 (units started into production) + 80,000 (WIP, Nov.1) = 380,000
2. Compute the costs per equivalent unit for November for the first process.
3. Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process in November.