Answer:
Using weighted average method
Statement of equivalent units
Material Conversion
Units Units
Units transferred out 19,000 19,000
Add: Closing work-in-progress 6,000 1,800
Average divisor 25,000 20,800
Computation of cost per unit
Material Conversion
$ $
Cost of beginning work-in-progress 10,000 19,000
Cost added 50,000 112,248
Total cost 60,000 131,248
Material cost per unit = $60,000
25,000 units
= $2.40 per unit
Conversion cost per unit = $131,248
20,800 units
= $6.31 per unit
Value of units transferred out
Material = 19,000 x $2.40 = $45,600
Conversion = 19,000 x $6.31 = $119,890
Value of closing work-in-progress
Material = 6,000 x $2.40 = $14,400
Conversion = 1,800 x $6.31 = 11,358
Explanation:
In this case, we need to prepare statement of equivalent units in order to ascertain the average divisor. The average divisor is the sum of units transferred out and closing work-in-progress. Then, we will obtain the total cost of material and conversion, which is the aggregate of cost of opening work-in-progress and cost of units added. We will also calculate the cost per unit, which is total cost of material and conversion divided by average divisor. Finally, the units transferred and ending work-in-progress will be valued at unit cost of material and conversion.
