Question

Cost of Units Completed and in Process

The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.

Work in Process—Assembly Department
Bal., 1,600 units, 35% completed	17,440	To Finished Goods, 29,600 units	?
Direct materials, 29,000 units @ $9.50	275,500
Direct labor	84,600
Factory overhead	39,258
Bal. ? units, 45% completed	?

a. Based on the above data, determine the different costs listed below.

1. Cost of beginning work in process inventory completed this period.	$
2. Cost of units transferred to finished goods during the period.	$
3. Cost of ending work in process inventory.	$
4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent.

Answer 1

Solution :

Assembly Department
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	1600
Units started this period	29000
Total unit to be accounted for	30600
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 65%	1600	0	1040
Started and completed currently	28000	28000	28000
Transferred to finished goods	29600	28000	29040
Units in ending WIP Material - 100% Conversion - 45%	1000	1000	450
Total units accounted for	30600	29000	29490

Assembly Department
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$399,358.00	$275,500.00	$123,858.00
Equivalent units		29000	29490
Cost per equivalent unit		$9.50	$4.20

Assembly Department
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$17,440
Current cost added to complete beginning WIP:
Material	$0	$0
Conversion (1040 * $4.20)	$4,368		$4,368
Total Cost from beginning inventory	$21,808
Current cost of unit started and completed:
Material (28000*$9.50)	$266,000	$266,000
Conversion (28000*$4.20)	$117,600		$117,600
Total cost of unit started and completed	$383,600
Total cost of unit transferred out	$405,408
Cost assigned to ending WIP:
Material (1000*$9.50)	$9,500	$9,500
Conversion (450*$4.20)	$1,890		$1,890
Total ending WIP inventory	$11,390
Total cost accounted for	$416,798

Refer above production cost report:

a1: Cost of beginning work in process inventory completed this period. = $4,368

a2: Cost of units transferred to finished goods during the period. = $405,408

a3: Cost of ending work in process inventory = $11,390

a4: Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent. = $21,808/1600 = $13.63 per unit