Question

The Polishing Department of Sunland Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process.

Production: Beginning inventory 1,800 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 43,600; ending inventory of 5,600 units 10% complete as to conversion costs.

Manufacturing costs: Beginning inventory costs, comprised of $21,500 of materials and $33,186 of conversion costs; materials costs added in Polishing during the month, $221,390; labor and overhead applied in Polishing during the month, $127,100 and $257,440, respectively.

Compute the equivalent units of production for materials and conversion costs for the month of September.

Materials Conversion Costs The equivalent units of production enter a number of units enter a number of units  

Compute the unit costs for materials and conversion costs for the month. (Round unit costs to 2 decimal places, e.g. 2.25.) Materials Conversion Costs Unit costs $enter a dollar amount rounded to 2 decimal places $enter a dollar amount rounded to 2 decimal places

Determine the costs to be assigned to the units transferred out and in process. (Round unit costs to 2 decimal places, e.g. 2.25 and final answers to 0 decimal places, e.g. 1,225.) Transferred out $enter a dollar amount rounded to 0 decimal places Ending work in process $enter a dollar amount rounded to 0 decimal places

Answer 1

Unit transferred out = 1800+43600-5600 = 39800 Units

a) Equivalent units

	Materials	Conversion Cost
Unit transferred out	39800	39800
Ending WIP	5600	5600*10% = 560
Equivalent units	45400	40360

b) Unit cost

	Material	Conversion Cost
Beginning WIP	21500	33186
Cost added	221390	384540
Total cost	242890	417726
Equivalent units	45400	40360
Unit cost	5.35	10.35

c) Calculate following

	Material	Conversion	Total
Transferred out	212930	411930	624860
Ending WIP	29960	5796	35756