FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:John Doe Company manufactures a product for which materials are added at the beginning of the
manufacturing process. A review of the company's inventory and cost records for the most
recently completed year revealed the following information:
Units
Materials
Conversion
Work in process, Jan. 1
80% complete with respect to
conversion costs
$100,000
$157,500
100,000
500,000
Units started into production
Costs added during the year:
Materials
$650,000
Conversion
$997,500
Units completed during the year
450,000
The company uses the weighted-average method in its process costing system. The ending
inventory is 50% complete with respect to conversion costs.
Required:
a) Compute the equivalent units of production and the cost per equivalent units for materials and
for conversion costs.
b) Determine the cost transferred to finished goods.
) Detemine the amount of cost that should be assigned to the ending work-in-process
inventory.
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