Question

Compute the equivalent units for direct materials and conversion costs.

2.

Compute the cost per equivalent unit.

3.

Assign the costs to units completed and transferred out and ending work in process inventory.

4.

Record the journal entry for the costs transferred out of the Assembly Department to the Testing Department.

5.

Post all of the transactions in the​ "Work in Process

Inventory—​Assembly"

​T-account. What is the ending​ balance?

Data:

Units in beginning Work in Process (WIP) inventory	120,000 units
Units started during the month (all direct materials, including cream and salt, are added at the beginning of the churning process)	1,600,000 units
Units in ending Work in Process (WIP) inventory (50% of the way through the process)	170,000 units
Cost information is as follows:
WIP - Churning Department balance as of January 1:
Direct material cost included in beginning WIP balance	293,600
Conversion cost included in beginning WIP balance	184,100
Beginning balance, WIP, January 1	$477,700
Manufacturing costs incurred during January:
Direct materials used	$1,650,000
Direct labor	8,000
Manufacturing overhead	560,000
Total manufacturing costs entered into production during January	$2,218,000

Johnson Dairy Churning Department
Month Ended January 31
Production Cost Report
	Flow of	Equivalent Units
	Physical	Direct	Conversion
Flow of Production	Units	Materials	Costs
Units to account for:
Beginning work in process, January 1	120,000
Plus: Started in production during January	1,600,000
Total physical units to account for	1,720,000
Units accounted for:
Completed and transferred out	1,550,000	1,550,000	1,550,000
Plus: Ending work in process, January 31	170,000	170,000	85,000
Total physical units accounted for	1,720,000
Total equivalent units		1,720,000	1,635,000

	Direct	Conversion
Total Costs to Account for and Cost per Equivalent Unit	Materials	Costs
Beginning work in process	$293,600	$184,100
Plus: Costs added during January	1,650,000	568,000
Total costs to account for	1,943,600	752,100
Divided by: Total equivalent units	1,720,000	1,635,000
Cost per equivalent unit	$1.13	$0.46

		Direct	Conversion
	Assignment of total costs:	Materials	Costs	Total
	Completed and transferred out:
	Equivalent units completed and transferred out	1,550,000	1,550,000
	Multiplied by: Cost per equivalent unit	$1.13	$0.46
	Costs assigned to units completed and transferred out	$1,751,500	$713,000	$2,464,500

	Ending work in process:
	Equivalent units in ending work in process, January 31	170,000	85,000
	Multiplied by: Cost per equivalent unit	$1.13	$0.46
	Costs assigned to units in ending work in process, January 31	$192,100	$39,100	231,200
	Total costs accounted for			$2,695,700

Answer 1

Equivalent units for direct materials = 1,720,000 units

Equivalent units for conversion cost = 1,635,000 units

Cost per equivalent unit for direct materials = 1.13 $

Cost per equivalent unit for conversion cost = 0.46 $