Cinnanmon
Mar 18, 2009, 12:47 PM
What is the formula for finding the materials cost for work-in-process using the average cost method?
I came of with this if my beg WIP is 11700 units with 4100 as cost then that makes the unit cost about 2.85 and if the units started is 43300 with 22900 cost then that makes the unit cost about 1.89. the units finished units 45000 I get confused with my next step if the WIP at the end is 50% of the inventory then I believe that then the units should be the 45000 plus 22500 which is whats left to finsh making it 67500 but do I add both costs then divide Im confused please guide me. thanks!
I came of with this if my beg WIP is 11700 units with 4100 as cost then that makes the unit cost about 2.85 and if the units started is 43300 with 22900 cost then that makes the unit cost about 1.89. the units finished units 45000 I get confused with my next step if the WIP at the end is 50% of the inventory then I believe that then the units should be the 45000 plus 22500 which is whats left to finsh making it 67500 but do I add both costs then divide Im confused please guide me. thanks!