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Weighted Average Method

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Shelby Company utilizes the weighted-average method in its process costing system. During September, the beginning inventory in the first process department summed up to 750 units. The costs and percentages completion of these units in the beginning inventory were as follows:

Cost Percent Complete
Materials costs.....................$11,000 70%
Conversion costs..................$18,500 50%

An overall total of 7,000 units were started and 6,000 units were transferred to the second processing department during the month. The following were incurred costs in the first processing department during September:

Materials costs........................$125,000.00
Conversion Costs.....................$300,000.00

The ending inventory was 90% complete in regards to materials and 40% complete in regards to conversion costs.

1. What are the equivalent units for materials for September in the first processing department? Please show all work.

2. What is the cost per equivalent unit for materials for September in the first processing department? Please show all work.

3. What are the equivalent units for conversion costs for September in the first processing department? Please show all work.

4. What is the cost per equivalent unit for conversion costs for the first department for September? Please show all work.

5. How many units are in the ending work in process inventory in the first processing department at the end of September? Please show all work.

6. What is the total cost transferred from the first processing department to the next processing department during September? Please show all work.

7. What is the cost of the ending work in process inventory in the first processing department? Please show all work.

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The solution explains the calculation of equivalent units, cost per equivalent unit and cost assignment using the weighted average method

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