Ash Company incurred direct materials costs of $1,600,000 during the year. Direct Labor costs were $600,000....

Ash Company incurred direct materials costs of $1,600,000 during the year. Direct Labor costs were $600,000. Manufacturing overhead was applied at the rate of 70% of direct labor costs. What were Ash Company’s total manufacturing costs for the year?

Superior Painting Company has the following production data for January:

· Beginning work in process, 0 units

· Units transferred out, 35,000

· Units in ending work in process, 10,000, which are 45% complete for conversion costs

Materials are added only at the beginning of the process.
a) Compute equivalent units of production for materials costs.

b) Compute equivalent units of production for conversion costs.

Solutions

Expert Solution

Calculation of total manufacturing cost
Material Cost	$ 1,600,000.00
Labor cost	$ 600,000.00
Manufacturing Overheads	$ 420,000.00
Total manufacturing cost	$ 2,620,000.00

Statement of Equivalent Units
		Material		Conversion Cost
	Units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	35,000	100%	35,000	100%	35,000
Closing WIP	10,000	100%	10,000	45%	4,500
Total	45,000	Total	45,000	Total	39,500

Requirement a

	Material costs
Equivalent Units of Production	45,000

Requirement b

	Conversion costs
Equivalent Units of Production	39,500

ekkarill92 answered 1 year ago

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