Weighted Average Method Accounting Need Help

Question

Use the following information to answer the following questions :

 

Morgan Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and completion of these units in beginning inventory were : 

 

Material Costs : Cost : $6,000 Percent Complete : 50%

 

Conversion Costs : Cost : $9,900 Percent Complete : 30%

 

A total of 9,200 units were started and 8,200 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month :

 

Material Costs : $113,900

Conversion Costs : $322,500

 

The ending inventory was 80% complete with respect to materials and 20% complete with respect to conversion costs.

 

Question 1 : What is the total cost transferred from the first processing department to the next processing department? (Choose closest answer)

A) $101,990 B) $318,421 C) $420,410 D) $436,400 E) $452,300

 

Answer was C) but I need help with steps as to how and why.

 

Question 2 : What was the cost of the ending work in process inventory in the first processing department?

A) $101,990 B) $119,900 C) $15,900 D) $332,400 E) $31,890

 

Answer was E) but I need help with steps as to how and why.

 

 

Answer 1

Question one

 

First I would calculate the ending inventory as follows:

Beginning inventory           800 - given

Started                            9200  given

Total                               10000

less completed                  8200 given

ending inventory               1800

 

Then I would calculate the weighted average equivalent units:

 

                                                   Materials                 Conversion

Completed and transferred               8200                         8200

(given)

Ending inventory              

     materials   1800 x .80                 1440

     conversion 1800 x .20                                                   360

 

Weighted average EU                       9640                         8560

 

next calculate costs

 

beginning inventory                         6000                           9900

incurred during month                  113900                        322500

   

Total                                           119900                        332400

 

next divide costs by EU                119900/9640 = 12.4377593 for materials

                                                  332400/560 =  38.8317757 for conversion

add the two together                                           51.2695257  cost per EU

multiply by units completed                                   x   8200

Total costs transferred                                        $420,410

 

Question two

 

Total costs incurred                                      119900  materials

                                                                  332400  conversion

                                                                  452300

less EU costs from those completed             (420410)

costs of ending wip                                     $31,890