Question

In: Accounting

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta...

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,600 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $690,168 in total. The ending work in process inventory in January consisted of 2,400 units, which were 70% complete with respect to materials and 50% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows:

Materials Labor Overhead
Cost per equivalent unit $ 14.10 $ 3.90 $ 7.50

Required:

1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.

2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.

3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.

4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Solutions

Expert Solution

1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.

Material Labor Overhead
Equivalent unit of ending work in process 2400*70% = 1680 2400*50% = 1200 2400*50% = 1200

2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.

Material Labour Overhead Total
Cost of ending work in process 1680*14.10 = 23688 1200*3.9 = 4680 1200*7.50 = 9000 37368

3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.

Material Labour Overhead Total
Cost of unit transferred out 25600*14.10 = 360960 25600*3.9 = 99840 25600*7.5 = 192000 652800

4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Total cost to be accounted for 690168
Cost accounted as
Cost of units transferred out 652800
Cost of ending work in process 37368
Total Cost accounted as 690168

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