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4) Cost per equivalent unit of direct materials and conversion (4 marks) The cost per equivalent...

4) Cost per equivalent unit of direct materials and conversion

The cost per equivalent unit of direct materials and conversion in the bottling department of Mountain Springs Water Company is $0.45 and $0.12, respectively. The equivalent units to be assigned costs are as follows:

Equivalent Units

Direct material

Conversion

Inventory in process, beginning of period

0

3,500

Started and completed during the period

57,000

57,000

Transferred out of bottling (completed)

57,000

60,000

Inventory in process, end of period

3,500

1,800

Total units and costs to be assigned

60,500

62,300

The beginning work in process inventory had a cost of $2,200. Determine the cost of completed and transferred out production and the ending work in process inventory. Round answers to nearest whole dollar.

Completed and transferred out production

$

Inventory in process, ending

$

Solutions

Expert Solution

1. Determine the cost of completed and transferred out production and the ending work in process inventory.
Particulars Direct material costs (a) Conversion costs (b) Total costs (a) + (b)
Inventory in process,Balance 2200
Inventory in process ,beginning of period 0 420 420
cost of completed beginning work-in-progress 2620
started and completed during the period 25650 6840 32490
Transferred out of bottling (Completed ) 35110
Inventory in process ,end of period 1575 216 1791
Total cost assigned by the bottling dept. 36901
Completed and transferred - out production 35110
Inventory in Process ,ending 1791
working notes:
1. calculate beginning inventory process of conversion costs is:
Beginning inventory process of conversion costs = Beginning inventory units * conversion cost per unit

ekkarill92 answered 1 hour ago
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