Question 2
Weighted-average method, equivalent units.
Consider the following data for the assembly division of Fenton Watches, Inc.:
The assembly division uses the weighted-average method of process costing.
Physical Units
(Watches)
Direct
Materials
Conversion
Costs
Beginning work in
process (May 1) a
80 $493,360 $91,040
Started in May 2012 500
Completed during
May 2012
460
Ending work in
process (May 31)b
120
Total costs added
during May 2012
$3,220,000 $1,392,000
a Degree of completion: direct materials, 90%; conversion costs, 40%.
b Degree of completion: direct materials, 60%; conversion costs, 30%.
Required:
1. Compute equivalent units for direct materials and conversion costs. Show physical
units in the first column of your schedule.
(16 Marks)
2. Summarize total costs to account for, calculate cost per equivalent unit for direct
materials and conversion costs, and assign total costs to units completed (and
transferred out) and to units in ending work in process.
(17 Marks)
3. Suppose the assembly division at Fenton Watches, Inc., uses the FIFO method of
process costing instead of the weighted-average method. Compute equivalent units
for direct materials and conversion costs. Show physical units in the first column of
your schedule.
(17 Marks)