Question

"I think we goofed when we hired that new assistant controller," said Ruth Scarpino, president of Provost Industries. "Just look at this report that he prepared for last month for the Finishing Department. I can’t understand it."

Finishing Department costs:
Work in process inventory, April 1,600 units; materials 100% complete; conversion 60% complete	$	8,799	*
Costs transferred in during the month from the preceding department, 3,100 units		36,623
Materials cost added during the month		15,617
Conversion costs incurred during the month		32,330
Total departmental costs	$	93,369
Finishing Department costs assigned to:
Units completed and transferred to finished goods, 4,100 units at $22.770 per unit	$	93,369
Work in process inventory, April 30, 600 units; materials 0% complete; conversion 40% complete		0
Total departmental costs assigned	$	93,369

*Consists of cost transferred in, $4,314; materials cost, $2,095; and conversion cost, $2,390.

"He's struggling to learn our system," replied Frank Harrop, the operations manager. "The problem is that he's been away from process costing for a long time, and it's coming back slowly."

"It's not just the format of his report that I'm concerned about. Look at that $22.770 unit cost that he's come up with for April. Doesn't that seem high to you?" said Ms. Scarpino.

"Yes, it does seem high; but on the other hand, I know we had an increase in materials prices during April, and that may be the explanation," replied Mr. Harrop. "I’ll get someone else to redo this report and then we can see what’s going on."

Provost Industries manufactures a ceramic product that goes through two processing departments—Molding and Finishing. The company uses the weighted-average method in its process costing.

Required:

1-a. Calculate the equivalent units of production.

1-b. Calculate the cost per equivalent unit. (Round your answers to 2 decimal places.)

1-c. How much cost should have been assigned to the ending work in process inventory? (Round your intermediate calculations to 2 decimal places.)

1-d. How much cost should have been assigned to the units completed and transferred to finished goods? (Round your intermediate calculations to 2 decimal places.)

	Transferred In Costs Materials Conversion Total 1-a. Equivalent units of production 1-b. Cost per equivalent unit 1-c. Cost of ending work in process inventory $0 1-d. Cost of units completed and transferred out $0

Garrison 16e Rechecks 2017-09-07

Next Visit question map

Question3of5Total3 of 5

Prev

Answer 1

Answers:

		Transferred in Costs	Material	Conversion	Total	Working #
1a	Equivalent units of production	4,700	4,100	4,340	13,140	See Working #1
1b	Cost per equivalent unit	$                     8.71	$                         4.32	$                       8.00	$                    21.03	See Working #2
1c	Cost of ending WIP Inventory	$             5,226.00	$                             -	$               1,920.00	$              7,146.00	See Working #3
1d	Cost of units completed and transferred out	$          35,711.00	$              17,712.00	$            32,800.00	$            86,223.00

--Working #1

Statement of Equivalent Units
		Cost Transferred	Material	Conversion Cost
	Units	Complete %	Equivalent units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	4,100	100%	4,100.0	100%	4,100.0	100%	4,100.0
Closing WIP	600	100%	600.0	0%	-	40%	240.0
Total	4,700	Total	4,700.0	Total	4,100.0	Total	4,340.0

--Working #2

Cost per Equivalent Units
COST	Cost Transferred	Material	Conversion Cost	TOTAL
Beginning WIP Inventory Cost	$               4,314.00	$             2,095.00	$                2,390.00	$               8,799.00
Cost incurred during period	$             36,623.00	$          15,617.00	$              32,330.00	$            84,570.00
Total Cost to be accounted for	$             40,937.00	$          17,712.00	$              34,720.00	$            93,369.00
Total Equivalent Units	4,700	4,100	4,340
Cost per Equivalent Units	$                   8.7100	$                4.3200	$                    8.0000	$                21.0300

--Working #3

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP	Transferred
		Units	Cost Allocated	Units	Cost Allocated
Cost Transferred	$                       8.71	600	$                5,226.00	4,100	$            35,711.00
Material	$                       4.32	-	$                             -	4,100	$            17,712.00
Conversion Cost	$                       8.00	240	$                1,920.00	4,100	$            32,800.00
TOTAL	$             93,369.00	TOTAL	$                7,146.00	TOTAL	$            86,223.00

feel free to ask any question and appriciate the answer Thank you