Exercise 6: Cost reconciliation schedule – weighted average method

Learning objective:
This exercise illustrates the preparation of a cost reconciliation schedule under the weighted average method.

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.

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 – (data taken from exercise 5):

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

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

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

Solution

Cost reconciliation schedule – weighted average method