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Weighted average cost method of equivalent production

Material is introduced at the beginning of the process in the Assembly Department. Conversion costs are applied uniformly throughout the process. As the process is completed, goods are immediately transferred to the finishing Department. Data for the Assembly Department for the month of July 2008 follow:
Work in process, June 30: $175,500 (consisting of $138,000 materials and $37,500 conversion costs); 100% completed for direct materials, but only 25% completed for conversion costs, 10,000 units

Units started during July, 80,000 units
Units completed during July, 70,000 units
Work in process, July 31: 100% completed for direct materials, but only 50% completed for conversion costs, 20,000 units
Direct materials added during July, $852,000
Conversion costs added during July, $634,500

1. Compute the total cost of goods transferred out of the Assembly Department during July.
2. Compute the total costs of the ending work in process. Preapre a production-cost report. Assume weighted-average product costing.

Solution Summary

The solution describes the weighted average method of finding equivalent production ,cost per unit, statement of cost and the process cost statement.