Hanson Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 17,000 units in its beginning work in process inventory that were 60% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $90,780. An additional 84,000 units were started into production during the month and 82,000 units were completed in the Welding Department and transferred to the next processing department. There were 19,000 units in the ending work in process inventory of the Welding Department that were 40% complete with respect to conversion costs. A total of $690,780 in conversion costs were incurred in the department during the month.

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To calculate the equivalent units of production and the cost per equivalent unit using the weighted-average method, follow these steps:

Step 1: Calculate the equivalent units of production for units completed and transferred out:
Units completed and transferred out = Completed units
Units completed and transferred out = 82,000 units

Step 2: Calculate the equivalent units of production for units in ending work in process inventory:
Equivalent units for ending work in process inventory = Units in ending inventory × Percentage completion
Equivalent units for ending work in process inventory = 19,000 units × 40% = 7,600 units

Step 3: Calculate the equivalent units of production for beginning work in process inventory:
Equivalent units for beginning work in process inventory = Units in beginning inventory × Percentage completion
Equivalent units for beginning work in process inventory = 17,000 units × 60% = 10,200 units

Step 4: Calculate the total equivalent units of production:
Total equivalent units of production = Equivalent units for units completed and transferred out + Equivalent units for ending work in process inventory + Equivalent units for beginning work in process inventory
Total equivalent units of production = 82,000 units + 7,600 units + 10,200 units = 99,800 units

Step 5: Calculate the cost per equivalent unit:
Cost per equivalent unit = Total conversion costs / Total equivalent units of production
Cost per equivalent unit = $690,780 / 99,800 units

Finally, you can calculate the cost per equivalent unit by dividing the total conversion costs by the total equivalent units of production.

To find the cost per equivalent unit and the total cost transferred out and in the ending work in process inventory, we can follow these steps using the weighted-average method:

1. Calculate the equivalent units of production for both the beginning work in process inventory and the units started during the month:

Equivalent Units = Number of units × Percentage of completion

For the beginning work in process inventory:
= 17,000 units × 60% = 10,200 equivalent units

For the units started during the month:
= 84,000 units × 100% = 84,000 equivalent units

2. Calculate the total equivalent units of production for the period:

Total Equivalent Units = Equivalent Units from the beginning work in process inventory + Equivalent Units from the units started during the month

= 10,200 equivalent units + 84,000 equivalent units = 94,200 equivalent units

3. Calculate the cost per equivalent unit:

Cost per Equivalent Unit = Total Conversion Costs / Total Equivalent Units

= $690,780 / 94,200 equivalent units

4. Calculate the cost of completed units:

Cost of Completed Units = Cost per Equivalent Unit × Equivalent Units of Production

For the units completed in the Welding Department:
= Cost per Equivalent Unit × 82,000 equivalent units

5. Calculate the cost transferred to the next processing department:

Cost Transferred = Cost per Equivalent Unit × Equivalent Units of Production

For the units transferred to the next processing department:
= Cost per Equivalent Unit × 82,000 equivalent units

6. Calculate the cost of the ending work in process inventory:

Cost of Ending Work in Process Inventory = Cost per Equivalent Unit × Equivalent Units of Production

For the ending work in process inventory:
= Cost per Equivalent Unit × 19,000 equivalent units

By following these steps, you will be able to calculate the cost per equivalent unit, the cost of completed units, the cost transferred to the next processing department, and the cost of the ending work in process inventory using the weighted-average method.

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