Question

The Hoed Corp. manufactures hats. All material is placed in process as soon as the goods are started in Department A. and conversion costs are incurred evenly throughout the process. Upon completion of the product it is immediately transferred to Department B. Department A-Month of April 20xx Status -Work in process 3/31/xx at 50% conversion 20,000 units completed at a cost of $300,000 ( $250,000 material cost and $50,000 conversion cost.) -Units started during April 50,000 units -Units completed during April 30,000 units -Work in process April 30th were 40,000 units 50% converted for conversion -Direct material added during April $450,000 -Conversion cost added during April $200,000 Required: 1. Calculate the total cost of the goods completed in Department A during April. 2. Calculate the total cost of the ending work in process in Department A for April.

Answer 1

		Equivalent units
	Physical units	Materials	Conversion
Units completed and transferred	30,000	30,000	30,000
Units in ending work in process	40,000	40,000	20,000 (40,000*50%)
Total	70,000	70,000	50,000

	Material	Conversion
Cost of beginning work in process	$250,000	$50,000
Cost added during April	450,000	200,000
Total costs	700,000	250,000
Equivalent units	70,000	50,000
Cost per equivalent unit	$10	$5

1.

Cost of goods completed = 30,000*$15 = $450,000

2.

Cost of ending work in process = (40,000*$10)+(20,000*$5)

Cost of ending work in process = $400,000+100,000 = $500,000