Cornerstone Exercise 6.10 (Algorithmic) Cost Information and the Weighted Average Method

Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown below.

Direct Materials Conversion Costs Units completed 40,000 40,000 Add: Units in ending work in process Percentage complete: 16,000 100% direct materials 16,000 16,000 40% conversion materials 6,400 Eqivalent units of output 56,000 46,400 Costs: Work in process, December 1: Direct materials $70,000 Conversion costs 12,000 Total work in process $82,000 Current costs: Direct materials $600,000 Conversion costs 186,000 Total current costs $786,000

Required:

1. Calculate the unit cost for December, using the weighted average method. Do NOT round interim calculations and, if required, round your answer to the nearest cent. $ per equivalent unit

2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.

Cost of goods transferred out:

Units completed $ Cost of EWIP Total costs assigned (accounted for) $

Reconciliation Cost to account for:

BWIP $ Current (December) Total $

3. What if you were asked to show that the weighted average unit cost for materials is the blend of the November unit materials cost and the December unit materials cost? The November unit materials cost is $4.38 ($70,000/16,000), and the December unit materials cost is $15.00 ($600,000/40,000). The equivalent units in BWIP are 16,000, and the FIFO equivalent units are 40,000. Calculate the weighted average unit materials cost using weights defined as the proportion of total units completed from each source (BWIP output and current output). Do NOT round interim calculations and, if required, round your answer to the nearest cent. $ per unit