Question

Washington, Inc., makes three models of motorized carts for vacation resorts, X-10, X-20, and X-40. Washington manufactures the carts in two assembly departments: Department A and Department B. All three models are processed initially in Department A, where all material is assembled. The X-10 model is then transferred to finished goods. After processing in Department A, the X-20 and X-40 models are transferred to Department B for final assembly, and then transferred to finished goods. There were no beginning work-in-process inventories on April 1. Data for April are shown in the following table. Ending work in process is 20 percent complete in Department A and 60 percent complete in Department B. Conversion costs are allocated based on the number of equivalent units processed in each department. Total X-10 X-20 X-40 Units started 570 330 230 Units completed in Department A 390 260 190 Units completed in Department B 220 150 Materials $ 365,750 $ 71,250 $ 99,000 $ 195,500 Conversion costs: Department A $ 291,850 Department B 52,250 Total conversion costs $ 344,100 Required: a. What is the unit cost of each model transferred to finished goods in April? b. What is the balance of work-in-process inventory on April 30 for Department A? Department B?

Answer 1

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Washington, Inc.,
Date Provided	X-10	X-20	X-40	Total
Units started	570.00	330.00	230.00	1,130.00
Units completed in dept. A	390.00	260.00	190.00	840.00
Units completed in dept. B		220.00	150.00	370.00
Materials	71,250.00	99,000.00	195,500.00	365,750.00
Conversion costs
Dept. A				291,850.00
Dept. B				52,250.00
Total Conversion costs				344,100.00
Department A
Allocation of costs
Units	X-10	X-20	X-40	Total
Units charged to production:
Beginning Inventory in process	-	-	-	-
Plus: Started production	570.00	330.00	230.00	1,130.00
Total physical units accounted for	570.00	330.00	230.00	1,130.00

Material costs	X-10	X-20	X-40
Units to be assigned costs:	Physical Units	Conversion %	EUP	Physical Units	Conversion %	EUP	Physical Units	Conversion %	EUP
Beginning Inventory in process	-	0%	-	-	0%	-	-	0%	-
Transferred to finished goods	390.00	100%	390.00	260.00	100%	260.00	190.00	100%	190.00
Ending, Inventory in process	180.00	100%	180.00	70.00	100%	70.00	40.00	100%	40.00
Total units to be assigned costs:	570.00		570.00	330.00		330.00	230.00		230.00
Costs incurred			71,250.00			99,000.00			195,500.00
Costs per equivalent unit			125.00			300.00			850.00

Conversion costs	Total
Units to be assigned costs:	Physical Units	Conversion %	EUP
Beginning Inventory in process	-	0%	-
Transferred to finished goods	840.00	100%	840.00
Ending, Inventory in process	290.00	20%	58.00
Total units to be assigned costs:	1,130.00		898.00
Costs incurred			291,850.00
Costs per equivalent unit			325.00

Answer a	Model X-10
Material costs	125.00
Conversion costs	325.00
Unit cost of Model X-10	450.00

Answer b	Materials
	X-10	X-20	X-40	Conversion	Total
Ending EUP	180.00	70.00	40.00	58.00
Cost per unit	125.00	300.00	850.00	325.00
Cost of ending EUP	22,500.00	21,000.00	34,000.00	18,850.00	96,350.00

So the balance of work-in-process inventory on April 30 for Department A is $ 96,350.

Department B
Allocation of costs
Units	X-20	X-40	Total
Units charged to production:
Beginning Inventory in process	-	-	-
Plus: Started production	260.00	190.00	450.00
Total physical units accounted for	260.00	190.00	450.00
Conversion costs	Total
Units to be assigned costs:	Physical Units	Conversion %	EUP
Beginning Inventory in process	-	0%	-
Transferred to finished goods	370.00	100%	370.00
Ending, Inventory in process	80.00	60%	48.00
Total units to be assigned costs:	450.00		418.00
Costs incurred			52,250.00
Costs per equivalent unit			125.00

Answer a	Model X-20	Model X-40
Material costs	300.00	850.00
Conversion costs- Dept. A	325.00	325.00
Conversion costs- Dept. B	125.00	125.00
Unit cost	750.00	1,300.00

Answer b	Dept. A
	X-20	X-40	Dept. B	Total
Ending EUP	40.00	40.00	48.00
Cost per unit	625.00	1,175.00	125.00
Cost of ending EUP	25,000.00	47,000.00	6,000.00	78,000.00

So the balance of work-in-process inventory on April 30 for Department B is $ 78,000.