Indian Defense Inc.

Step: 1
On Wt. Avg method
Flow of Production Physical Direct Conversion
STEP 1 & 2 Units Materials Costs
Work in process, October 1 20
Started in October 80
To account for 100

Completed and transferred out during current 90 90 90

Work in process, October 31 10 10 7
Units accounted for Sum (Work done to
date) 100 100 97

Direct Conversion
STEP 3 & 4 Costs Total costs Materials Costs
Work in process, October 1 $ 580,000 $ 460,000 $ 120,000
Costs added currently 2,935,000 2,000,000 935,000
3 Total costs to account for $ 3,515,000 2,460,000 1,055,000
Divided by equivalent units 100 97
4 Unit costs (weighted averages) $ 35,476 $ 24,600 $ 10,876

STEP 5 Application of costs Total costs

Completed and transferred out $ 3,192,866
Work in process, October 31
Direct materials $ 246,000
Conversion costs 76,134
Total work in process 322,134
Total costs accounted for $ 3,515,000
tep: 1

Step: 2

70%

Equivelent units

Value in Finished Goods

Value in WIP