Question

Cost of Units Transferred Out and Ending Work in Process

The costs per equivalent unit of direct materials and conversion in the Rolling Department of Kraus Steel Company are $1.90 and $1.40, respectively. The equivalent units to be assigned costs are as follows:

	Equivalent Units
	Direct Materials		Conversion
Inventory in process, October 1	0		1,900
Started and completed during October	32,000		32,000
Transferred out of Rolling (completed)	32,000		33,900
Inventory in process, October 31	4,000		2,400
Total units to be assigned costs	36,000		36,300

The beginning work in process inventory on October 1 had a cost of $1,200. Determine the cost of completed and transferred-out production, the ending work in process inventory, and the total costs assigned by the Rolling Department.

Completed and transferred-out production	$
Inventory in process, October 31	$
Total costs assigned by the Rolling Department	$

Answer 1

Solution:

Kraus Steel Company
Rolling Department
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$1,200
Current cost added to complete beginning WIP:
Material	$0	$0
Conversion (1900*$1.40)	$2,660		$2,660
Total Cost from beginning inventory	$3,860
Current cost of unit started and completed:
Material (32000*$1.90)	$60,800	$60,800
Conversion (32000*$1.40)	$44,800		$44,800
Total cost of unit started and completed	$105,600
Total cost of unit transferred out	$109,460
Cost assigned to ending WIP:
Material (4000*$1.90)	$7,600	$7,600
Conversion (2400*$1.40)	$3,360		$3,360
Total ending WIP inventory	$10,960
Total cost accounted for	$120,420