Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,400 units and transferred them to the next department. The cost of beginning inventory and the costs added during January amounted to $670,076 in total. The ending inventory in January consisted of 3,200 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 $ 13.40 $ 4.00 $ 7.10 Required: 1. Compute the equivalent units of materials, labor, and overhead in the ending inventory for the month. 2. Compute the cost of ending inventory and of the units transferred to the next department for January. 3. 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 inventory and costs added during the month.)

Answer 1

Requirement 1

Equivalent units of production

27,640

27,000.0

27,000

Requirement 2

	Material	Labor	Overhead	Total
Cost of ending work in process	$         30,016.00	$          6,400.00	$    11,360.00	$       47,776.00
Cost of Units Completed and transferred out	$       340,360.00	$      101,600.00	$ 180,340.00	$     622,300.00

Requirement 3

Cost reconciliation
Total cost to be accounted for	$       670,076.00
Costs accounted for as follows
Cost of ending work in process	$         47,776.00
Cost of Units Completed and transferred out	$       622,300.00
Total costs accounted for	$       670,076.00

Working

Statement of Equivalent Units(Weighted average)
		Material		Labor		Overhead
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	25,400	100%	25,400.0	100%	25,400.0	100%	25,400
Closing WIP	3,200	70%	2,240.0	50%	1,600.0	50%	1,600
Total	28,600		27,640	Total	27,000.0	Total	27,000

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$                 13.40	2,240	$    30,016.00	25,400	$ 340,360
Labor	$                    4.00	1,600	$      6,400.00	25,400	$ 101,600
Overhead	$                    7.10	1,600	$    11,360.00	25,400	$ 180,340
		TOTAL	$ 47,776	TOTAL	$ 622,300