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Hobart Beverage Company uses the weighted-average method in its process costing system. Materials are included at the start of the production process but conversion costs are uniformly applied throughout the production process. The following data about the Packaging Department were taken from the company's accounting records:
In 1 January 2016, there were 20,000 units in the work in process inventory that were 40% completed and 150,000 units in the finished goods inventory.
The company sold 300,000 units during January.
There were 32,000 units, which were 75% complete as to conversion costs, in the work in process inventory and 120,000 units in the finished goods inventory at the end of January.
Cost data are summarized below:
WIP 1 January 2016
Cost per equivalent unit
Direct Materials
$ 34,900
Materials
$2.45
Conversion costs
$ 41,500
Conversion
$3.15
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