Hi-Test Company uses the weighted-average method of process costing to assign production costs to its products. Information for September follows. Assume that all materials are added at the beginning of its production process, and that conversion costs are added uniformly throughout the process. Work in process inventory, September 1 (2,000 units, 100% complete with respect to
direct materials, 80% complete with respect to direct labor and overhead; includes
$45,000 of direct material cost, $25,600 in direct labor
cost, $30,720 overhead cost) $101,320
Units started in April 28,000
Units completed and transferred to
finished goods inventory 23,000
Work in process inventory, September 30 (units, 100% complete with respect to direct materials, 40% complete with respect to direct labor and overhead) ?
Costs incurred in September
Direct materials $375,000
Conversion $341,000
Required:
Compute each of the following, assuming Hi-Test uses the weighted-average method of process costing.
1. The number of physical units that were transferred out and the number that are in ending work in process inventory.
2. The number of equivalent units for materials and conversion for the month.
Equivalent Units of Production (EUP)
Units % Material EUP-Materials % Conversion EUP-Conversion
Equivalent units of production
3. The cost per equivalent unit of materials and conversion for the month.
Cost per Equivalent Unit of Production Direct Materials Conversion
Total costs
÷ Equivalent units of production
Cost per equivalent unit of production
4. The total cost of goods transferred out.
Costs Transferred Out EUP Cost per EUP Total cost
Direct materials
Conversion
Total transferred out

7. The total cost of ending work in process inventory.
Costs of Ending Work in Process EUP Cost per EUP Total cost
Direct materials
Conversion
Total cost of ending work in process

Answer and Explanation:

The computation of given question is shown below:-

                                      Hi-Test Company

                            Weighted-average method

                                                              Equivalent units

Particulars                            Physical units  Material  Conversion costs

Units to be accounted for

Beginning work-in-progress    2,000

Production started                    28,000

Total units                                  30,000

Units accounted for:

1. Completed and transferred

out                                             23,000        23,000        23,000

                                                                 (23,000 × 100%)

Ending work-in-progress          7,000          7,000           2,800

                                                               (7,000 × 100%) (7,000 × 40%)

2. Total units                             30,000         30,000       25,800

                                           Materials   Conversion costs  Total costs

Costs to account for:

Beginning work in

progress                              $45,000        $56,320               $101,320

                                                  ($25,600 + $30,720)

Costs added during

period                                  $375,000      $341,000            $716,000

Total costs                           $420,000     $397,320            $817,320

÷

Total equivalent unit

of production                         $30,000      $25,800

3. Cost per equivalent unit   $14.00         $15.40

Cost accounted for

4. Completed and transferred

out                                         $322,000     $354,200         $676,200

                                      (23,000 × $14.00) (2,800 × $15.40)

7. Ending work in progress   $98,000        $43,120            $141,120

                                    (30,000 × $14.00) (25,800 × $15.40)

Total cost                                $420,000     $397,320         $817,320

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