Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed

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Equivalent unit costs of work done in current period only
4.17 Transferred-in costs, weighted-average method. (35–40 min) 1
Solution Exhibit Ab Steps 1 and 2: Summarise output in physical units and calculate equivalent units, Cooking Department of Telemark-Kjemi for June 2010.

Solution Exhibit B
Step 3: Calculate equivalent unit costs, Assembly Division of Aéro-France for May 2010.
Direct
materials
Conversion
costs
Equivalent unit costs of opening work in progress
Work in progress, opening (given)
€4,968,000
€928,000 Divide by equivalent units of opening work in progress from Solution Exhibit A)
÷ 7.2
÷ 3.2 Cost per equivalent unit of opening work in progress
€690,000
€290,000
Equivalent unit costs of work done in current period only Costs added in current period (given)
€32,200,000
€13,920,000 Divide by equivalent units of work done in current period from Solution Exhibit A)
÷ 46
÷ 46.4 Cost per equivalent unit of work done in current period only
€700,000
€300,000
4.17
Transferred-in costs, weighted-average method.
(35–40 min)
1
Solution Exhibit A calculates the equivalent tonnes of solvent completed and transferred out, and in closing work in progress for each cost element. The key steps to the calculations are
a
Fill in row 4 for equivalent units of opening work in progress as given in the exercise assignment. (Although not needed for doing the exercise, note that the physical units column is the same as the transferred-in column since all transferred-in units are always 100% complete)
b
Fill in row 5 for equivalent units of work done in June 2010 as given in the exercise assignment.
c
Adding the numbers in rows 4 and 5 gives the numbers for row 3, the total tonnes to be accounted for.
d
Fill in row 1 with 90 (tonnes completed and transferred out.
e
Subtracting the numbers in row 1 from the numbers in row 3 gives the equivalent tonnes in closing work in progress for each cost element.
2
Solution Exhibit B presents calculations of equivalent unit costs under the weighted-average method.
3
Solution Exhibit C presents a summary of total costs to account for and assigns these costs to tonnes completed and to tonnes in closing work in progress using the weighted-average method.

Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
Solution Exhibit Ab Steps 1 and 2: Summarise output in physical units and calculate equivalent units, Cooking Department of Telemark-Kjemi for June 2010.

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