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The following information is available from the Oils Division of Glasgow Corporation for December. Conversion costs...

The following information is available from the Oils Division of Glasgow Corporation for December. Conversion costs for this division were 75 percent complete as to beginning work-in-process inventory and 50 percent complete as to ending work-in-process inventory. Information about conversion costs follows:

Units Conversion Costs
WIP at December 1 (75% complete) 115,000 $ 431,250
Units started and costs incurred during December 555,000 2,600,625
Units completed and transferred to next department during December 415,000 ?

The Oils Division uses FIFO.

Required:

a-1. Compute the equivalent units for conversion costs.

a-2. Compute the cost per equivalent unit for conversion costs. (Round your answers to 2 decimal places.)

a-3. What was the conversion cost of work-in-process inventory in the Oils Division at December 31? (Do not round intermediate calculations.)

b. What were the conversion costs per equivalent unit produced last period and this period, respectively? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Solutions

Expert Solution

1 Equivalent Units:
Units Working Note:
Completed Units 300000 Units Completed &Transferred 415000
Working on Opening WIP(115000*25%) 28750 Less: From Opening WIP 115000
Closing WIP(255000*50%) 127500 From Current 300000
Equivalent Units 456250
Opening WIP 115000
Units Started 555000
Less: Transferred 415000
Closing WIP 255000
2 Cost Per Equivalent Unit:
Cost Incurred During the Period 2600625
Equivalent Units 456250
Cost Per Equivalent Unit: 5.70
3 Cost of Closing WIP:
Closing WIP(255000*50%) 127500
Cost Per Equivalent Unit: 5.70
Closing WIP 726750
B Conversion Cost Per Equivalent Units: Current Last
Cost Per Equivalent Unit: 5.70 5.00
Last Period E Units:
(115000*75%) 86250 a
WIP Cost 431250 b
Conversion Cost Per Equivalent Units: 5.00 b/a

ekkarill92 answered 2 years ago
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