Reference no: EM132714358
Question - Weighted Average Method, Unit Cost, Valuing Inventories
Cassien Inc. manufactures products that pass through two or more processes. During June, equivalent units were computed using the weighted average method:
Units completed 53,400
Units in EWIP X Fraction complete (36,000 X 60%) 21,600
Equivalent units of output 75,000
June's costs to account for are as follows:
BWIP (10,000 units, 80% complete) $50,000
Materials 90,000
Conversion costs 34,000
Total $174,000
Required -
1. Calculate the unit cost for June using the weighted average method. Round your answer to the nearest cent.
2. Using the weighted average method, determine the cost of EWIP and the cost of the goods transferred out. If required, round your answers to the nearest dollar.
3. Cassien had just finished implementing a series of measures designed to reduce the unit cost to $2.00 and was assured that this had been achieved and should be realized for June's production. Yet, upon seeing the unit cost for June, the president of the company was disappointed. Can you explain why the full effect of the cost reductions may not show up in June? What can you suggest to overcome this problem?