Question

A department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of July, there was no beginning work in process; 39700 units were completed and transferred out; and there were 20000 units in the ending work in process that were 30% complete. During July, $202980 materials costs and $173660 conversion costs were charged to the department. The unit production costs for materials and conversion costs for July were

Materials

Conversion Costs

$4.44

$2.91

$3.40

$3.80

$3.40

$2.91

$5.11

$4.37

Answer 1

Correct Answer : Option B
	Material	Conversion	Total
Cost per equivalent unit	3.40	3.80
Cost Reconciliation Report
Costs to be accounted for:
	Total	Material	Conversion
Costs in beginning inventory	-	-	-
Cost added during the year	376,640	202,980	173,660
Total cost to account for	376,640	202,980	173,660
	Total	Material	CC
Cost Accounted for
Units completed and transfer	285,840	134,980	150,860
Units in ending inventory	90,800	68,000	22,800
Total Cost Accounted for	376,640	202,980	173,660
Production Cost Report
Working Note 1:
	Actual Units
Calculation of Physical UNITS:
Units in beginning inventory	-
Units started during the period	59,700
Units to be accounted for	59,700
	Actual Units	Equivalent Units
		Material	Conversion
Units Completed and Transferred	39700	39700	39700
Units in ending inventory	20000	20000	6000
Total accounted for	59700	59700	45700
Working Note 2:
Costs to be accounted for:
	Total	Material	Conversion
Costs in beginning inventory	-	-	-
Cost added during the year	376,640	202,980	173,660
Total cost to account for	376,640	202,980	173,660
Equivalent Units from above		59700	45700
Cost per equivalent unit		3.40	3.80