Question
In: Accounting
The following is partial information for the month of March for Macmillan International Inc., a two-department...
The following is partial information for the month of March
for Macmillan International Inc., a two-department manufacturer
that uses process costing:
Determine assignment of costs.
Work in process, beginning (67% converted)
15,000
units
Costs of beginning work in process:
Transferred in from department A
$ 9,500
Materials
0
Conversion
11,200
Units completed and transferred out during March
45,000
units
Units transferred in during March from department A
?
units
Work in process, ending (37.5% converted)
16,000
units
Materials costs added during March
$13,000
Conversion costs added during March
$63,000
Other information:
1. Material is introduced at the beginning in department A and
more material is added at the very end in department B.
2. Conversion costs are incurred evenly throughout both
processes.
3. As the process in department A is completed, goods are
immediately transferred to department B; as goods are completed in
department B, they are transferred to finished goods.
4. Unit costs of production in department A in March were as
follows:
Materials
$0.55
Conversion
0.40
Total
$0.95
5. The company uses the weighted-average method.
Instructions
a. Calculate the cost of goods transferred out of department B
in March.
$117,720
b. Calculate the cost of the March ending work in process
inventory in department B
Solutions
Expert Solution
a. Cost of Goods transferred out = $117717 or $117720 (due to rounding off)
b. Cost of ending WIP = $22683 or $22680
| Physical units | Transferred in | Material | Conversion | |
| Work in Process Beginning | 15000 | |||
| Started during the period | 46000 | |||
| To account for | 61000 | |||
| Units transferred | 45000 | 45000 | 45000 | 45000 |
| Work in Process Ending | 16000 | 16000 | 0 | 6000 |
| Accounted for | 61000 | |||
| Equivalent units | 61000 | 45000 | 51000 | |
| Transferred in | Material | Conversion | Total | |
| Cost of Beginning Work in Process | $ 9,500 | $ - | $ 11,200 | $ 20,700 |
| Cost added during the period | $ 43,700 | $ 13,000 | $ 63,000 | $ 119,700 |
| Total Cost to account for | $ 53,200 | $ 13,000 | $ 74,200 | $ 140,400 |
| Equivalent units of Production | 61000 | 45000 | 51000 | |
| Cost per equivalent unit | $ 0.87 | $ 0.29 | $ 1.45 | $ 2.62 |
| Transferred in | Material | Conversion | Total | |
| Units Completed and transferred out | ||||
| Units transferred to next department | 45000 | 45000 | 45000 | |
| Cost per equivalent unit | $ 0.87 | $ 0.29 | $ 1.45 | |
| Cost of units transferred out | $ 39,246 | $ 13,000 | $ 65,471 | $ 117,717 |
| Transferred in | Material | Conversion | Total | |
| Ending work in Process Inventory | ||||
| Equivalent units of Production | 16000 | 0 | 6000 | |
| Cost per equivalent unit | $ 0.87 | $ 0.29 | $ 1.45 | |
| Cost of Ending work in Process Inventory | $ 13,954 | $ - | $ 8,729 | $ 22,683 |
| Total Costs Accounted for | $ 53,200 | $ 13,000 | $ 74,200 | $ 140,400 |
ekkarill92 answered 2 years agoRelated Solutions
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