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., 7,000 units, 55% completed	19,110	To Finished Goods, 161,000 units	?
Direct materials, 165,000 units @ $1.3	214,500
Direct labor	323,500
Factory overhead	125,760
Bal. ? units, 30% 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?
Yes

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?
Increase

Answer 1

Description	Whole Units	Direct Materials	Conversion Costs
Units in Beginning Inventory Completed in Current Period	7000	0	3150
Units Started and Completed in Current Period (165000-11000) = 2,900	154000	154,000	154,000
Units in Ending Inventory	11000	11,000	3,300
Total Equivalent Units Completed During the Period		165,000	160,450
Cost added during the Period		214500	449260
Equivalent Cost Per unit		$                        1.30	$                      2.80
Cost of beginning work in process inventory completed this period.
Beginning WIP Cost	$                       19,110.00
Add Cost to Complete Beginning work in process 3150*2.80	$                         8,820.00
1. Cost of beginning work in process inventory completed this period.	$                       27,930.00
Cost of units transferred to finished goods during the period.
1. Cost of beginning work in process inventory completed this period.	$                       27,930.00
Cost incured for units started and Completed 154000*(1.30+2.80)	$                     631,400.00
2. Cost of units transferred to finished goods during the period.	$                     659,330.00
Cost of ending work in process inventory.
Direct Materials 11000*1.30	$                       14,300.00
Conversion Costs 3300**2.80	$                         9,240.00
3. Cost of ending work in process inventory.	$                       23,540.00
4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent.
Cost of beginning work in process inventory completed this period.	$                       27,930.00
No of units in Beginning WIP	7000

b. Did the production costs change from the preceding period?
Yes

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?

the conversion costs per equivalent unit  decrease