Exercise 6: Cost reconciliation – weighted average method

Note: In this exercise, we have used the data of Fedex Company from exercise 5. If you have directly come to this exercise, we recommend you first try to solve exercise 5 and then come back to this exercise to continue.

The Fedex Company uses a weighted average method to account for units and costs. The following information belongs to the company’s first processing department.

Quantity schedule and equivalent units – (taken from exercise 5):

Computation of cost per equivalent unit – (taken from exercise 5):

The cost per equivalent for the month of May for first department has been computed below:

Required: Using above data, complete the following cost reconciliation of the first processing department of Fedex Company:

Solution

Cost reconciliation of first department – weighted average method