Question

Kim Manufacturing uses a process cost system to manufacture Dust Density Sensors for the mining industry. The following information pertains to operations for the month of May Beginning work-in-process inventory, May1 16,000 untis Started in production during May 100,000 Units Completed production during May 92,000 untis Ending work-in-process inventory, May 31 24,000 units . The beginning inventory was 20% complete for materials and 60% complete for conversion costs. The ending inventory was 40% complete for materials and 90% complete for conversion costs. Costs pertaining to the month of May are as follows: Beginning inventory costs are materials, $20,280; direct labor, $20,320; and factory overhead, $15,240. Costs incurred during May are materials used, $467,680; direct labor, $182,800; and factory overhead, $389,200. Using the FIFO method, the total cost of units in the ending work-in-process inventory at May 31

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				16,000
Add: Units Started in Process				100,000
Total Units to account for:				116,000
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				16000
Units started and completed				76,000
Ending Work in Process				24,000
Total Units to be accounted for:				116,000
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			80%	12,800	40%	6,400
Units started and completed			100%	76,000	100%	76,000
Ending Work in Process			40%	9,600	90%	21,600
Total Equivalent units				98,400		104,000
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			467,680		572,000
Equivalent Units			98,400		104,000
Cost per Equivalent unit			4.753		5.5
TOTAL COST ACCOUNTED FOR:
Ending Work in process (24,000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			9,600	4.753	45625
Conversison Cost			21,600	5.5	118800
Total cost of Ending Work in process:					164,425
Cost of Ending Wip: $ 164425