Question

During the month of March, Buildem Inc. produces a single product, Krumble, en mass in a continuous production process. The company assigns standard costs for direct materials ($52/unit) and conversion costs ($145/unit) The company produced 5,000 units in the current. The company started the month with 2,500 units in beginning WIP inventory and end the month with 2,250 units, complete to 50%.

Using the Standard process-costing method, determine the following:

1. How many equivalent units were completed and transferred in March?

2. What is the total production cost to account for in the current period?

3. Summarize the assignment of costs to beginning WIP inventory, started and completed and ending WIP inventory?

Answer 1

i)	Statement Of Equivalent Production
	Input	Output	EquivalentProduction Units
	Material	Conversion Cost
	Items	Units	Items	Units	Units	%	Units	%
	Opening WIP	2500	Opening WIP completed	2500	0	0%	1250	50%
	Units Introduced	4750	Started & Completed	2500	2500	100%	2500	100%
			Closing WIP	2250	2250	100%	1125	50%
	Equivalent units of Production	7250		7250	4750		4875
ii)	Particulars	Equivalent Units	Cost per unit	Total Cost
	Direct Material	4750	$52	$247,000
	Converion Cost	4875	$145	$706,875
	TOTAL COST	$953,875
iii)	Assignment of Cost
	Opening WIP
			Opening WIP	Started and Completed	Closing WIP
	Particulars	Cost per unit	Equivalent Units	Total Cost	Equivalent Units	Total Cost	Equivalent Units	Total Cost
	Direct Material	$52	0	$0	2500	$130,000	2250	$117,000
	Converion Cost	$145	1250	$181,250	2500	$362,500	1125	$163,125
	TOTAL COST		$181,250		$492,500		$280,125