305 Midterm Chapter 4

Question 1

Weighted Average Method Steps for production cost report? (4)

Answer 1

1) Units to be Accounted for
Physical Equivalent
BWIP
Started
= Total

2) Units Accounted For (how much I made)
Physical Equivalent
Complete (transferred out)
EWIP
= Total

3) Costs accounted for
DM CC Total
BWIP
+Cost added in period
= Total Cost
/ Equivalent units
= cost per unit

4) Cost Reconciliation (copy paste step 2 & 3)

Completed Units (Units completed in step 2 * Total cost per unit in step 3)
EWIP DM (Units EWIP for DM * DM per unit $)
EWIP CC ( Units EWIP for CC * CC per unit $)
Total EWIP
Total Completed
Total cost accounted for

Question 2

What does Equivalent units mean?

Answer 2

How many units you completed in % in terms of full units.
Physical Units —> 20% Complete —> Equivalent units
10 units x % completion = 2

Question 3

Rules for Equivalent method:
If number is complete, it is [ ]% complete.

Answer 3

100%

Question 4

There are alternatives for the weighted average method for equivalent units. What are these?

Answer 4

1. costs are added @ the beginning of the process
2. costs are added @ the end of the process
3. Costs are added evenly/uniformly throughout the process
4. Costs are added at a certain % of completion
5. Transferred in costs: * Assume added at the beginning of process (Total cost per unit previous department * Units started current department)

Question 5

Total in step 1 is the total in step ?

Answer 5

2!

Question 6

Approach to anwering questions: they will ask you either
1. Units –> Step 1 & 2
2. Cost –> Step ?

Answer 6

3 & 4

Question 7

How do you calculate conversion cost?

Answer 7

DL
AMOH (EWIP CC*hours spent)
————
CC