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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.

a-3. What was the conversion cost of work-in-process inventory in the Oils Division at December 31?

b. What were the conversion costs per equivalent unit produced last period and this period, respectively?

Solutions

Expert Solution

UNITS TO ACCOUNT FOR:
Beginning Work in Process units 1,15,000
Add: Units Started in Process 5,55,000
Total Units to account for: 6,70,000
UNITS TO BE ACCOUNTED FOR:
Units completed from beginning WIP 115000
Units started and completed 3,00,000
Ending Work in Process 2,55,000
Total Units to be accounted for: 6,70,000
Equivalent Units:
UNITS Conversion Cost
% Completion Units
Units completed from Beg. 115000 25% 28,750
Units started and completed 300000 100% 3,00,000
Ending Work in Process 255000 50% 1,27,500
Total Equivalent units 670000 4,56,250
Req a1
Equivalent units of Conversion cost: 456250
Reqa-2
Conversion cost incurred during the period 2600625
Divide: EUP of conversion cost 456250
Conversion cost per EUP 5.7
Reqa-3
EUP of ending WIP inventory 127500
Multiply: Conversion cost per EUP 5.7
Conversion cost included in Ending WIP 726750
Req b.
Conversion cost in beginning WIP 431250
Divide: EUP complted in previous period (115000*75%) 86250
Conversion cost per EUP in last period 5
Last period Current period
Conversion cost per EUP 5 5.7

ekkarill92 answered 2 years ago
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