Coca-Cola uses a process cost accounting system and a weighted-average cost flow assumption. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July, $190,000 of materials costs and $137,100 in conversion costs were charged to the department. The beginning work in process inventory was $93,000 on July 1, comprised of $80,000 of materials costs and $13,000 of conversion costs. (20 pts)
Other data for the month of July are as follows:

Beginning work in process inventory, 7/1 25,000 units (40% complete)

Units completed and transferred out 70,000 units

Ending work in process inventory, 7/31 30,000 units (30% complete)

Instructions

Answer the following questions and show computations to support your answers.

1. How many physical units have to be accounted for in July?

2. What are the equivalent units of production for materials and for conversion costs for the month of July?

3. What is the total cost assigned to the 70,000 units that were transferred out of the process in July?

4. What is the total cost of the July 31 inventory?

we will draw the table using the weighted average method through that we will be able to identify equivellent production units and cost per unit with respect to material and conversion cost.

cost opening current Total complete Wip equivalent Cost

head cost Units p.unit

Material 80,000 190,000 270,000 70,000 30,000 100,000 2.70

C.cost 13,000 137,100 150,100 70,000 12,000 82,000 1.83

4.53

Complete 70,000 4.53 317,134

Closing Wip

Material 30,000 2.70 81,000

Labour 12,000 1.83 21,966

102,966

Total Cost 420,100

in the table Closing wip units related to Conversion cost represent 40% completion.

opening wip CC units 70% have been completed in the current which are included in complete units i.e 70000 units