Question

Washington, Inc., makes three models of motorized carts for vacation resorts, X-10, X-20, and X-40. Washington manufactures the carts in two assembly departments: Department A and Department B. All three models are processed initially in Department A, where all material is assembled. The X-10 model is then transferred to finished goods. After processing in Department A, the X-20 and X-40 models are transferred to Department B for final assembly, and then transferred to finished goods.

There were no beginning work-in-process inventories on April 1. Data for April are shown in the following table. Ending work in process is 20 percent complete in Department A and 50 percent complete in Department B. Conversion costs are allocated based on the number of equivalent units processed in each department.

	Total			X-10			X-20			X-40
Units started					470			380			210
Units completed in Department A					440			270			180
Units completed in Department B								235			150
Materials	$	329,000		$	47,000		$	114,000		$	168,000
Conversion costs:
Department A	$	277,200
Department B		31,312
Total conversion costs	$	308,512

Required:

a. What is the unit cost of each model transferred to finished goods in April?

b. What is the balance of work-in-process inventory on April 30 for Department A? Department B?

Answer 1

Req A
Unit cost
X-10	400.00
X-20	675.00
X-40	1175.00
Req b
Work In Process Inventory
Department A	70,200
Department B	56,437
Working Notes: (Req A)
Product	Material Cost (1)	No. of Units (2)	Cost per Units (3) = (1)/(2)
X-10	47000	470	100
X-20	114000	380	300
X-40	168000	210	800

Conversion cost per equivalent Units - Dept.A
	Physical Units	Conversion cost
		Eq. Units
Flow of Units:
Units to be accounted for:
Beginning WIP inventory	0
Units started this period	1060
Total Units accounted for:	1060
Units accounted for:
Completed and transferred out	890	890
Units in ending Inventory	170	34
Total Units accounted for:	1060	924
	Total	Conversion Cost
Cost to be accounted for:
Cost in beginning WIP	0	0
Current Period costs	277200	277200
Total cost to be accounted for:	277200	277200
Cost per equivalent Units
Conversion cost		300.00
Conversion cost per equivalent Units - Dept. B
	Physical Units	Conversion cost
		Eq. Units
Flow of Units:
Units to be accounted for:
Beginning WIP inventory	0
Units started this period	450
Total Units accounted for:	450
Units accounted for:
Completed and transferred out	385	385
Units in ending Inventory	65	32.5
Total Units accounted for:	450	417.5
	Total	Conversion Cost
Cost to be accounted for:
Cost in beginning WIP	0	0
Current Period costs	31312	31312
Total cost to be accounted for:	31312	31312
Cost per equivalent Units
Conversion cost		75.00

Cost of Units Transferred to Finished Goods	X-10	X-20	X-40
Unit Material Cost	100	300	800
Department A Conversion cost	300.00	300.00	300.00
Department B Conversion cost		75.00	75.00
Total	400.00	675.00	1175.00
Working Note(Req 2:)
WIP Ending Inventory balance
Department A
Material Cost	No. of Units	Unit Cost	Total Cost
X-10	30	100	3,000
X-20	110	300	33,000
X-40	30	800	24,000
Total material cost			60,000
Conversion costs	34	300.00	10,200
Total			70,200
Department B
Material Cost	No. of Units	Unit Cost	Total Cost
X-20	35	300	10,500
X-40	30	800	24,000
Total material cost			34,500
Conversion costs:
From Department A	65	300.00	19,500
From Department B	32.5	75.00	2,437
Total Conversion Cost			21,937
Total			56,437