Question

Equivalent Units of Production and Related Costs

The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.

Work in Process-Assembly Department
Bal., 3,000 units, 25% completed	6,825	To Finished Goods, 69,000 units	?
Direct materials, 71,000 units @ $1.4	99,400
Direct labor	195,600
Factory overhead	76,100
Bal. ? units, 65% completed	?

Determine the following:

a. The number of units in work in process inventory at the end of the period.
units

b. Equivalent units of production for direct materials and conversion. If an amount is zero or a blank, enter in "0".

Work in Process-Assembly Department
Equivalent Units of Production for Direct Materials and Conversion Costs
	Whole Units	Equivalent Units Direct Materials	Equivalent Units Conversion
Inventory in process, beginning
Started and completed
Transferred to finished goods
Inventory in process, ending
Total units

c. Costs per equivalent unit for direct materials and conversion. If required, round your answers to the nearest cent.

	Costs Per Equivalent Unit
Direct Materials	$
Conversion	$

d. Cost of the units started and completed during the period.
$

Answer 1

(a) Number of Units in work in process inventory at the end of the period

= Units in work in process inventory at the beginning of the period + units introduced of materials - units of finished goods

= 3000 + 71000 - 69000 = 5000

(b)

Work in Process-Assembly Department
Equivalent Units of Production for Direct Materials and Conversion Costs
Particulars	Whole Units	Equivalent Units Direct Materials		Equivalent Units Conversion
		% Completed	Equivalent Units	% Completed	Equivalent Units
Inventory in process, beginning	3000	75%	=3000*75% =2250	75%	=3000*75% =2250
Started and completed	66000	100%	=66000*100% =66000	100%	=66000*100% =66000
Transferred to finished goods	69000	100%	=69000*100% =69000	100%	=69000*100% =69000
Inventory in process, ending	5000	65%	=5000*65% =3250	65%	=5000*65% =3250
Total units of Equivalent Production   (= Inventory in process, beginning + Started and completed + Inventory in process, ending)			71500		71500

(c)

Computation of Cost per unit
Particulars	Materials($)	Conversion cost($)
Input of materials	99400	-
Direct Labour	-	195600
Factory Overhead	-	76100
Total Cost	99400	271700
Equivalent Units	71500	71500
Cost per Unit	1.39	3.80

(d) Cost of Units started and completed during the year

= (Cost per unit of material + cost per unit of conversion cost) * Number of Units started and completed during the year

= (1.39+3.80) * 66000

= $ 342540