Problem 3: Weighted Average Method

The May data for Thor Corporation are shown below:

Department A Department B

Units started in process 25,000

Units received from previous department 15,000

Units transferred to finished goods inventory 7,000

Units completed but not transferred 1,000

Ending units in process 10,000 (80% direct Materials, 7,000

65% Conversion costs) (75% conversion costs)

Costs added by department:

Direct materials P12, 650

Direct Labor 13,545 P9,805

Manufacturing Overhead (applied) 5,160 6,625

Required: For both departments:

1. Compute equivalent unit of production.
2. Prepare a separate cost of production report.