Question

Alpha Company Had The Following Information For FY 2017: Work In Process

Alpha Company had the following information for FY 2017:

Work in Process - 1/1/17

100,000 units

Units Started into Production

575,000 units

Work in Process - 12/31/17

75,000 units

Direct Material put into Production

$575,000

Direct Labor put into Production

$843,750

The beginning work in process was 100% complete as to direct materials and 75% complete as to conversion costs.

The ending work in process was 100% complete as to direct materials and 50% complete as to conversion costs.

The beginning work in process consisted of:

Direct Material

$943,750

Conversion Costs

$303,750

Alpha company uses the weight-average method. Use the information to prepare the cost allocation section of the cost of production report for FY 2017.

Answer 1

		Units
Reconciliation of Units
A	Opening WIP	100,000
B	Introduced	575,000
C=A+B	TOTAL	675,000
D	Transferred	600,000
E=C-D	Closing WIP	75,000

Statement of Equivalent Units
		Material		Conversion Cost
	Units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	600,000	100%	600,000	100%	600,000
Closing WIP	75,000	100%	75,000	50%	37,500
Total	675,000	Total	675,000	Total	637,500

Cost per Equivalent Units
COST	Material	Conversion Cost	TOTAL
Beginning WIP Inventory Cost	$            943,750	$              303,750	$     1,247,500
Cost incurred during period	$            575,000	$              843,750	$     1,418,750
Total Cost to be accounted for	$        1,518,750	$          1,147,500	$     2,666,250
Total Equivalent Units	675,000	637,500
Cost per Equivalent Units	$ 2.25	$ 1.80

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$             2.25000	75,000	$              168,750	600,000	$             1,350,000
Conversion Cost	$             1.80000	37,500	$                67,500	600,000	$             1,080,000
TOTAL	$         2,666,250	TOTAL	$              236,250	TOTAL	$             2,430,000

Reconciliation and cost report
Cost to be accounted for
Beginning Work In Progress:
Cost Transferred	$                        -
Material	$       943,750.00
Conversion Cost	$       303,750.00	$ 1,247,500.00
Cost incurred during period:
Material	$       575,000.00
Conversion Cost	$       843,750.00	$   1,418,750.00
Total Cost to be accounted for				$      2,666,250.00
Cost accounted for
Cost of Units transferred	Equivalent Units	Cost per Equivalent Units	Cost accounted for
Material	600,000	$ 2.25	$ 1,350,000.00
Conversion Cost	600,000	$ 1.80	$ 1,080,000.00
				$      2,430,000.00
Cost of ending WIP	Equivalent Units	Cost per Equivalent Units	Cost accounted for
Material	75,000	$ 2.25	$      168,750.00
Conversion Cost	37,500	$ 1.80	$        67,500.00
				$          236,250.00
Total Cost accounted for				$      2,666,250.00