Wit Company uses the weighted-average method in its process costing system. Information for the month of May concerning Department A, the first stage of the company's production process follows: Material costs are added at the beginning of the process. The ending work in process is 50% complete with respect to conversion costs. How would the costs be distributed? Goods completed and transferred out Ending work in proces

Materials Conversion

Equivalent units of production

100,000 95,000

Cost per equivalent unit

$0.24 $0.20

Cost transferred out

$21,600 $18,000

Cost of ending work in process

$2,400 $1,000

Explanation:

Computation of how Wit Company costs will be distributed

Materials Conversion

Transferred to next department

90,000 90,000

Ending work in process:

10,000 5,000

The production Equivalent units

100,000 95,000

Materials Conversion

Begining Work in process

4,000 3,000

Cost added during the month

20,000 16,000

Total cost $24,000 $19,000

÷Equivalent units

100,000 95,000

Cost per equivalent unit

$0.24 $0.20

Materials Conversion

TotalUnits transferred out

90,000 90,000

×Cost per equivalent unit $0.24$0.20

= Cost transferred out

$21,600 $18,000 =$39,600

Materials Conversion

Equivalent units of production:

Ending work in process

10,000 5,000

×Cost per equivalent unit$0.24$0.20

Cost of ending work in process

$2,400 $1,000 =$3,400

Calculation for Ending work in progress

Materials 10,000 units × 100%complete

=10,000

Conversion

10,000 units × 50% complete

=5,000

Calculation for Cost per equivalent unit

Total cost

Material $24,000

Conversion $19,000

÷ Equivalent units

Material 100,000

Conversion 95,000

=

Material $0.24

Conversion $0.20

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