Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,600 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $702,315 in total. The ending work in process inventory in January consisted of 3,900 units, which were 50% complete with respect to materials and 30% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows:

	Materials			Labor			Overhead
Cost per equivalent unit	$	13.90		$	3.80		$	7.20

Required:

1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.

2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.

3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.

4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Answer 1

1)		Material	Labor	Overhead
	Equivalent unit	3900*50% = 1950	3900* 30% = 1170	3900* 30 % = 1170
		Material	Labor	Overhead	Total
Given	Cost per equivalent unit	13.90	3.80	7.20	24.90
2)		Total
	Cost of ending WIP	39,975	(see below note)
		Material	Labor	Overhead	Total
	Cost of ending WIP	27,105	4,446	8,424	39,975
3)		Total
	Cost of unit transferred out	662,340	(see below note)
		Material	Labor	Overhead	Total
	Cost of unit transferred out	369,740	101,080	191,520	662,340
4)	Cost reconciliation
	Total cost to be accounted for	702,315	(See above note)
	Cost Accounted as
	Units transferred out cost	662,340
	Cost of Endind WIP	39,975
	Total Cost Accounted as	702,315