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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Weighted Average Method, Unit Cost, Valuing Inventories

Polson Enterprises produces strawberry gelato. Output is measured in quarts. Polson uses the weighted average method. During July, Polson had the following production data:

Chapter 6, Problem 34BEB, Weighted Average Method, Unit Cost, Valuing Inventories Polson Enterprises produces strawberry

Required:

  1. 1. Using the weighted average method, calculate the equivalent units for July.
  2. 2. Calculate the unit cost for July.
  3. 3. Assign costs to units transferred out and EWIP.

1.

To determine

Compute equivalent units by applying weighted average method.

Explanation

Equivalent Units of Production:

The total units of finished goods along with those goods that are not fully complete are known as equivalent units of production. In other words, equivalent units of production measures both completed and nearly completed units.

Use the following formula to calculate the equivalent units:

Equivalent units= Units completed+Total Units in EWIP

2.

To determine

Calculate the unit cost of Company PE.

3.

To determine

Calculate cost of units transferred and cost of EWIP.

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