Question

Use below information for Questions 10 to 13:

The smelting department of Company X has following production and cost data for September:

• Production: Beginning work in process 200 units that are 100% complete as to materials and 77% complete as to conversion costs; units started into production 1,000 units; ending work in process 250 in units that are 100% complete as to materials and 50% complete to conversion costs.
• Manufacturing costs: Beginning work in process TL8,700 materials, TL9,200 labor and TL2,500 manufacturing costs. In current period, TL50,500 worth of materials, TL25,000 worth of labor and TL37,000 worth of manufacturing overhead costs are incurred.

Q-10) Compute the material cost portion of the transferred out inventory if the company uses WA method to compute equivalent units.

Q-11) Compute the conversion cost portion of the transferred out inventory if the company uses FIFO method to compute equivalent units. met hod to compute fquivalent units.

Q-12) Compute the material cost portion of the ending inventory if the company uses FIFO method to compute equivalent units.

Q-13) Compute the conversion cost portion of the ending inventory if the company uses WA method to compute equivalent

Answer 1

Solution

Q-10) Compute the material cost portion of the transferred out inventory if the company uses WA method to compute equivalent units.

Answer------------$57,749.02 or 57,749

Q-11) Compute the conversion cost portion of the transferred out inventory if the company uses FIFO method to compute equivalent units. met hod to compute equivalent units.

Answer------------$ 72,918.83 or $72,919

Q-12) Compute the material cost portion of the ending inventory if the company uses FIFO method to compute equivalent units.

Answer------------$57,937.50 or $57,938

Q-13) Compute the conversion cost portion of the ending inventory if the company uses WA method to compute equivalent

Answer------------$914.39 or 914

Working

Reconciliation of Units
A	Beginning WIP	200
B	Introduced	10,000
C=A+B	TOTAL	10,200
D	Transferred out	9,950
E=C-D	Ending WIP	250

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	9,950			100%	9,950	100%	9,950
Ending WIP	250			100%	250	50%	125
Total	10,200			Total	10,200	Total	10,075

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost (A)		$ 8,700	$ 11,700	$ 20,400
Cost incurred during period (B)		$ 50,500	$ 62,000	$ 112,500
Total Cost to be accounted for (C=A+B)		$ 59,200	$ 73,700	$ 132,900
Total Equivalent Units(D)		10,200	10,075
Cost per Equivalent Units (E=C/D)		$                   5.80	$                     7.32	$                     13.12

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 5.80	250	$             1,450.98	9,950	$          57,749.02
Conversion cost	$ 7.32	125	$                914.39	9,950	$          72,785.61
TOTAL	$ 132,900	TOTAL	$ 2,365	TOTAL	$ 130,535

.

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	200	100%	77%	0%	23%
Units introduced	10,000
Total units to be accounted for	10,200
Completed and Transferred unit	9,950	0%	0%	100%	100%
Ending WIP	250	0%	0%	100%	50%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	200	0%	-	23%	46
From units started/Introduced	9,750	100%	9,750	100%	9,750
Total	9,950		9,750		9,796
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	250	100%	250	50%	125
Total EUP	10,200		10,000		9,921

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material		Conversion cost		TOTAL
Cost incurred in Current Period	$ 50,500		$ 62,000		$ 112,500
Total Equivalent Units	10,000		9,921
Cost per Equivalent Units	$ 5.05		$ 6.249		$ 11.30
Cost of Beginning WIP	$ 8,700		$ 11,700		$ 20,400
Total cost to be accounted for					$ 132,900

.

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred		9,950.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	-	$ 5.05	$ 0
	Conversion cost	46	$ 6.25	$ 287	$ 287
B	From units started & completed
	Material	9,750	$ 5.05	$ 49,238
	Conversion cost	9,750	$ 6.25	$ 60,931	$ 110,169
C=A+B	Total				$ 110,456
D	Cost of Beginning WIP				$ 20,400
E=C+D	Total Cost of Units transferred				$           130,856.33
	Cost of	Ending WIP		250.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
F	Material	250	$ 5.05	$ 1,263
G	Conversion cost	125	$ 6.25	$ 781
H = F + G	Total Cost of Ending WIP				$ 2,044
I = E + H	Total Cost accounted for				$ 132,900
J	Rounding Off Differences				$ 0
K = I + J	Total cost to be accounted for [equals to computed in STEP 3]				$ 132,900