Arsenio Company manufactures a single product that goes through two processes, mixing and cooking. The following data pertain to the mixing department for August: Work-in-process inventory, August 1
Conversion: 70% complete 27,000 units
Work-in-process inventory, August 31
Conversion: 50% complete 34,000 units
Units started 73,000
Units completed and transferred out ?
Costs
Work-in-process inventory, August 1
Material X $ 52,000
Material Y 90,000
Conversion 118,940
Costs added during August
Material X 153,800
Material Y 114,600
Conversion
213,060
Material X is added at the beginning of work in the mixing department. Material Y is also added in the mixing department, but not until units are 70% complete with regard to conversion. Conversion costs are incurred uniformly during the process. The company uses the weighted-average cost method.
Required:
1. & 2. Calculate the equivalent units and costs per equivalent unit of material X, material Y, and conversion for the mixing department.
3. Calculate the cost of units transferred out.
4. Calculate the cost of the ending Work-in-Process Inventory.

Arsenio Company

1. & 2. Equivalent units and cost per equivalent unit:

                                           Material X      Material Y  Conversion

Total equivalent units        100,000           66,000    83,000

Cost per equivalent unit    $2.058              $3.10        $4.00

3. Cost of units transferred out = $604,428

4. Cost of the ending Work-in-Process Inventory = $137,972

Explanation:

a) Data and Calculations:

                                               Units   % completed

August 1: Work-in-Process    27,000    18,900 (70%)

Units started                          73,000

Total units in process          100,000  

August 31: Work-in-Process 34,000    17,000 (50%)

Units completed and

 transferred out    =             66,000

Cost of production:

                                              Material X      Material Y  Conversion  Total

Work-in-process inventory,  $ 52,000      $90,000   $118,940  $260,940

August 1  

Costs added during August  153,800        114,600     213,060      481,460

Total cost for the period    $205,800    $204,600  $332,000  $742,400

Equivalent unit of production

Units completed and

 transferred out (66,000)   66,000 (100%) 66,000      66,000

Ending WIP (34,000)            34,000 (100%)   0               17,000 (50%)

Total equivalent units        100,000              66,000    83,000

Cost per equivalent unit:

Total cost for the period    $205,800    $204,600  $332,000

Total equivalent units         100,000         66,000       83,000

Cost per equivalent unit    $2.058              $3.10        $4.00

Cost assigned to:

Units completed and

 transferred out (66,000) $135,828    $204,600     $264,000  $604,428

Ending WIP                            69,972        0                    68,000      137,972

Total costs assigned       $205,800     $204,600     $332,000  $742,400