Question

Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2020 totaled $2,283,744 as follows.

Work in process, November 1
Materials		$78,600
Conversion costs		48,700		$127,300
Materials added				1,592,280
Labor				225,100
Overhead				339,064

Production records show that 35,200 units were in beginning work in process 30% complete as to conversion costs, 661,000 units were started into production, and 25,400 units were in ending work in process 40% complete as to conversion costs. Materials are entered at the beginning of each process.

(a)

Determine the equivalent units of production and the unit production costs for the Assembly Department. (Round unit costs to 2 decimal places, e.g. 2.25.)

		Materials		Conversion Costs
Equivalent Units
Cost per unit		$		$

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(b)

Determine the assignment of costs to goods transferred out and in process.

Costs accounted for:
Transferred out		$
Work in process, November 30
Materials	$
Conversion costs
Total costs		$

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(c)

Prepare a production cost report for the Assembly Department. (Round unit costs to 2 decimal places, e.g. 2.25 and other answers to 0 decimal places, e.g. 125.)

RIVERA COMPANY Assembly Department Production Cost Report For the Month Ended November 30, 2020
				Equivalent Units
Quantities		Physical Units		Materials		Conversion Costs
Units to be accounted for
Work in process, November 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, November 30
Total units
Costs				Materials		Conversion Costs		Total
Unit costs
Total Costs				$		$		$
Equivalent units
Unit costs				$		$		$
Costs to be accounted for
Work in process, November 1								$
Started into production
Total costs								$
Cost Reconciliation Schedule
Costs accounted for
Transferred out								$
Work in process, November 30
Materials						$
Conversion costs
Total costs								$

Answer 1

Question specifically not mentioned the method followed for process costing. Therefore, solution has been provided under both FIFO and Weighted average method

A. Weighted Average method

Particulars	Units
Units introduced	661000
Less:-
Closing WIP	25400
Closing Finished Goods	0
	635600
Add:-
Opening WIP	35200
Units transferred	670800

1. Statement of Equivalent Production (Weighted average cost method )

Inputs	Outputs	Equivalent Output
Particulars	Units	Particulars	Units	Direct Material	Conversion cost
%	Units	%	Units
Opening W I P	35,200	Opening W I P	-
Opening Finished Goods	-	Units introduced and completed	6,70,800	100%	6,70,800	100%	6,70,800
New Units introduced	6,61,000	Closing W I P	25,400	100%	25,400	40%	10,160
Total	6,96,200	Total	6,96,200		6,96,200		6,80,960

2. Statement of Cost per Equivalent units (Under Weighted average method) (In $)

Element of Cost	Cost of opening WIP (A)	Cost of processing during month (B)	Total Cost C = (A+B)	Equivalent Units (In No.)(D)	Cost per unit (C/D)
Direct Material	78,600	15,92,280	16,70,880	6,96,200	2.40
Conversion cost	48,700	5,64,164	6,12,864	6,80,960	0.90
Total Cost	1,27,300	21,56,444	22,83,744		3.30

3. Cost assigned to Units completed and transferred (Under Weighted average cost method)

Element of cost	Equivalent Units (A) (In No.)	Cost per equivalent unit (B)	Total Cost (A*B) (In $)
Direct Material	670800	2.40	16,09,920
Conversion cost	670800	0.90	6,03,720
Total Cost			22,13,640

4. Cost assigned to Closing working in process (Under Weighted average cost method)

Element of cost	Equivalent Units (A) (In No.)	Cost per equivalent unit (B)	Total Cost (A*B) (In $)
Direct Material	25400	2.40	60,960
Conversion cost	10160	0.90	9,144
Total Cost			70,104

5. Cost Reconcilation schedule

Particulars	Amount (In $)
Costs to be accounted for
Cost of beginning work in process inventory	1,27,300
Costs added to production during the period	21,56,444
Total costs to be accounted for	22,83,744
Costs accounted as follows:
Transferred out	22,13,640
Work in process, November 30
Materials	60,960
Conversion costs	9,144
Total costs accounted for	22,83,744

B. Under FIFO Method

1. Equivalent units

Inputs		Outputs	Equivalent Output
Particulars	Units	Particulars	Units	Direct Material	Conversion cost
				%	Units	%	Units
Opening W I P	35200	Opening W I P	35,200	-	-	70%	24,640
Opening Finished Goods	0	Units introduced and completed	6,35,600	100%	6,35,600	100%	6,35,600
New Units introduced	661000	Closing W I P	25,400	100%	25,400	40%	10,160
Total	696200	Total	6,96,200		6,61,000		6,70,400

2. Statement of Cost per Equivalent units (Under FIFO method) (In $)

Element of Cost	Cost of processing during month (A)	Equivalent Units (In No.)(B)	Cost per unit (A/B)
Direct Material	15,92,280	6,61,000	2.41
Labour & OH	5,64,164	6,70,400	0.84
Total Cost	21,56,444		3.25

3. Cost assigned to Units completed and transferred (Under FIFO method)

Element of cost	Equivalent Units (A) (In No.)	Cost per equivalent unit (B)	Total Cost (A*B) (In $)
Opening WIP
Material	-	-	78,600
Labour& OH	-	-	48,700
Added costs
Direct Material	635600	2.41	15,31,094
Labour & OH	660240	0.84	5,55,614
Total Cost			22,14,008

4. Cost assigned to Closing working in process (Under FIFO method)

Element of cost	Equivalent Units (A) (In No.)	Cost per equivalent unit (B)	Total Cost (A*B) (In $)
Direct Material	25400	2.41	61,186
Labour & OH	10160	0.84	8,550
Total Cost			69,736

5. Cost Reconciliation schedule

Particulars	Amount (In $)
Costs to be accounted for
Cost of beginning work in process inventory	1,27,300
Costs added to production during the period	21,56,444
Total costs to be accounted for	22,83,744
Costs accounted as follows:
Transferred out	22,14,008
Work in process, November 30
Materials	61,186
Conversion costs	8,550
Total costs accounted for	22,83,744