Question

ASDA Company reported the following activity in the Assembly Department for the month of May:

	Units	Percent Completed
		Materials	Conversion
Work in process, May 1	360	50%	10%
Units started into production in May	7200
Units completed and transferred out of Department A during May	6480
Work in process, May 30	1080	70%	20%

Required:

1- Compute the equivalent units of production using the weighted-average method

2- Compute the cost per equivalent unit using the weighted-average method

3- Assign costs to units using the weighted-average method

4- Prepare a cost reconciliation report

Compute and Apply Cost

Beginning Work in Process Inventory: 360 units
Materials:              50% complete	$        7347
Conversion:           10% complete	$        4704
Production started during May	7200 units
Production completed during May	6480 units
Costs added to production in May
Materials cost	$    142,345
Conversion cost	$     97,356
Ending Work in Process Inventory:    1080 units
Materials:             70% complete
Conversion:          20% complete

1- Compute the equivalent units of production using the weighted-average method

	Materials	Conversion
Units completed and transferred out of the Department in May
Work in process, May 30:
Equivalent units of Production in the Department during May

2- Compute the cost per equivalent unit using the weighted-average method

	Materials	Conversion	Total cost
Cost to be accounted for:
Work in process, May 1
Total cost
Equivalent units
cost per equivalent unit

3- Assign costs to units using the weighted-average method

Assembly Department Cost of Ending WIP Inventory and Units Transferred Out
	Materials	Conversion	Total
Ending WIP inventory:
Equivalent units
Cost per equivalent unit
Cost of Ending WIP inventory
Units completed and transferred out:
Cost of units transferred out

4- Prepare a cost reconciliation report

Assembly Department Cost Reconciliation
Costs to be accounted for:
Cost of beginning Work in Process Inventory
Costs added to production during the period
Total cost to be accounted for
Cost accounted for as follows:
Cost of ending Work in Process Inventory
Cost of units transferred out
Total cost accounted for

Answer 1

Solution

Please leave comment in case of any confusion or query.

	Materials	Conversion
Units completed and transferred out of the Department in May	6480	6480
Work in process, May 30:
Whole units	1080	1080
% completed	0.7	0.2
Equivalent units in ending inventory	756	216
Equivalent units of Production in the Department during May	7236	6696

	Materials	Conversion	Total cost
Cost to be accounted for:
Work in process, May 1	$       7,347.00	$     4,704.00	$     12,051.00
	$    142,345.00	$    97,356.00	$   239,701.00
Total cost	$    149,692.00	$ 102,060.00	$   251,752.00
Equivalent units	7236	6696
cost per equivalent unit	$            20.69	$          15.24

Assembly Department
Cost of Ending WIP Inventory and Units Transferred Out
	Materials	Conversion	Total
Ending WIP inventory:
Equivalent units	756	216
Cost per equivalent unit	$            20.69	$          15.24
Cost of Ending WIP inventory	$     15,639.46	$     3,292.26	$     18,931.72
Units completed and transferred out:
Equivalent units	6480	6480
Cost per equivalent unit	$            20.69	$          15.24
Cost of units transferred out	$    134,052.54	$    98,767.74	$     232,820.28

Assembly Department
Cost Reconciliation
Costs to be accounted for:
Cost of beginning Work in Process Inventory	$     12,051.00
Costs added to production during the period	$    239,701.00
Total cost to be accounted for	$    251,752.00
Cost accounted for as follows:
Cost of ending Work in Process Inventory	$     18,931.72
Cost of units transferred out	$    232,820.28
Total cost accounted for	$      251,752.00