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., 5,000 units, 35% completed 16,175 To Finished Goods, 115,000 units ? Direct materials, 118,000 units @ $1.8 212,400 Direct labor 372,700 Factory overhead 144,960 Bal. ? units, 55% completed ? a. Based on the above data, determine the different costs listed below. If required, round your interim calculations to two decimal places. 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. $ b. Did the production costs change from the preceding period? No c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?

Answer 1

Working notes:

		Equivalent units
	Physical units	Material		Conversion
		% completion	Units	% completion	Units
Beginning work in process	5,000			65%	3,250
Started and completed (115,000-5,000)	110,000	100%	110,000	100%	110,000
Transferred out	115,000
Ending work in process	3,000	100%	3,000	55%	1,650
Total	118,000		113,000		114,900

Cost per equivalent units:

Material cost per unit = $212,400 / 113,000 = $1.88

Conversion cost per unit = $372,700+144,960 / 114,900 = $4.5

Total cost per unit = $1.88+4.5 = $6.38

1. Cost of beginning work in process inventory:

Beginning balance = $16,175

Further cost incurred to complete = 3,250*$4.5 = $14,625

Cost of beginning work in process inventory = $16,175+14,625 = $30,800

2. Cost of units transferred to finished goods:

Cost of units started and completed = 110,000*$6.38 ($1.88+4.5) = $701,800

Cost of beginning work in process inventory = $30,800

Cost of units transferred to finished goods = $701,800+30,800 = $732,600

3. Cost of ending work in process:

Direct material cost = 3,000*$1.88 = $5,640

Conversion cost = 1,650*$4.5 = $7,425

Cost of ending work in process = $5,640+7,425 = $13,065

4. Cost per unit of completed beginning work in process inventory = $30,800/5,000 = $6.16

b. Yes

c. Preceding period conversion cost per unit = $6.16-1.88 = $4.28

Conversion cost per equivalent unit in current period has increase .