Question

"I think we goofed when we hired that new assistant controller," said Ruth Scarpino, president of Provost Industries. "Just look at this report that he prepared for last month for the Finishing Department. I can’t understand it." Finishing Department costs: Work in process inventory, April 550 units; materials 100% complete; conversion 60% complete $ 8,442 * Costs transferred in during the month from the preceding department, 2,050 units 19,466 Materials cost added during the month 7,070 Conversion costs incurred during the month 15,740 Total departmental costs $ 50,718 Finishing Department costs assigned to: Units completed and transferred to finished goods, 2,000 units at $25.360 per unit $ 50,718 Work in process inventory, April 30, 600 units; materials 0% complete; conversion 40% complete 0 Total departmental costs assigned $ 50,718 *Consists of cost transferred in, $4,272; materials cost, $1,990; and conversion cost, $2,180. "He's struggling to learn our system," replied Frank Harrop, the operations manager. "The problem is that he's been away from process costing for a long time, and it's coming back slowly." "It's not just the format of his report that I'm concerned about. Look at that $25.360 unit cost that he's come up with for April. Doesn't that seem high to you?" said Ms. Scarpino. "Yes, it does seem high; but on the other hand, I know we had an increase in materials prices during April, and that may be the explanation," replied Mr. Harrop. "I’ll get someone else to redo this report and then we can see what’s going on." Provost Industries manufactures a ceramic product that goes through two processing departments—Molding and Finishing. The company uses the weighted-average method in its process costing. Required: 1-a. Calculate the equivalent units of production. 1-b. Calculate the cost per equivalent unit. (Round your answers to 2 decimal places.) 1-c. How much cost should have been assigned to the ending work in process inventory? (Round your intermediate calculations to 2 decimal places.) 1-d. How much cost should have been assigned to the units completed and transferred to finished goods? (Round your intermediate calculations to 2 decimal places.)

Answer 1

Weighted average cost
Beginning units	550	Transferred out	2,000
Units received from preceeding	2050	Ending units	600
	2600		2600
Equivalent units	Trasferred in	Material	Conversion cost
Units transferred                      A	2000	2000	2,000
Ending Units	600	600	600
Completion	100%	0%	40%
B	600	0	240
Total units	2600	2000	2240
Cost per equivalent units
Particulars	Trasferred in	Material	Conversion cost
As at beginning	4272	1990	2180	8442
Added during the month	19466	7070	15740	42276
Cost to be accounted for	23738	9060	17920	50718
Total eqivalent units	2600	2000	2240
Cost per equivalent unit	9.13	4.53	8.00	21.66
Cost per equivalent unit = Cost to be accounted for / Total equivalent units

Cost of ending work in progress
Particulars	Trasferred in	Material	Conversion cost
Ending units	600	600	600
Cost per equivalent units	9.13	4.53	8.00
Completion	100%	0%	40%
Total cost	5478.00	0.00	1920
Total cost	7398
Cost of goods transferred
Particulars	Trasferred in	Material	Conversion cost
Number of units	2000	2000	2000
Cost per equivalent units	9.13	4.53	8.00
Total amount	18260.00	9060.00	16000
Total cost	43320