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QUESTION : - CMA PART 1- PROCESS COSTING - WEIGHTED AVAERAGE METHOD -

  • 1.  QUESTION : - CMA PART 1- PROCESS COSTING - WEIGHTED AVAERAGE METHOD -

    Posted 07-30-2023 09:49 AM
    Would any one help to find the solution ?

    Mack Inc. uses a weighted-average process costing system. Direct materials and conversion costs are incurred evenly during the production process. During the month of October, the following costs were incurred.
            Direct materials    $39,700
            Conversion costs   70,000
    The work-in-process inventory as of October 1 consisted of 5,000 units valued at $4,300, that were 20% complete. During October, 27,000 units were transferred out. Inventory as of October 31 consisted of 3,000 units that were 50% complete. The weighted-average inventory cost per unit completed in October was

    a) 3.51
    b) 3.86
    c) 3.99
    d) 4.00



    WITH REGARDS,


    SARUN PORATHUR SIMON




  • 2.  RE: QUESTION : - CMA PART 1- PROCESS COSTING - WEIGHTED AVAERAGE METHOD -

    Posted 07-30-2023 12:56 PM

    Note that

    1. DM and CC are incurred evenly during production
    2. The weighted-average method is used

    EUP = 28,500

    units transferred out = 27,000 (27,000 * 100 %)

    ending WIP = 1,500 ( 3,000 * 50%)

    Total costs = cost of beginning WIP + costs incurred during the period 

    4,300 + 39,700 + 70,000 = $ 114,000

    Cost / equivalent unit = $ 114,000 / 28,500

    = $ 4 

    DM 



    ------------------------------
    AHMED M. K. ALMADHOUN
    Accountant
    ------------------------------



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