Question

Cost of Units Completed and in Process

The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.

Work in Process—Assembly Department

Bal., 6,000 units, 70% completed16,140To Finished Goods, 138,000 units?

Direct materials, 141,000 units @ $1.5211,500  

Direct labor178,700  

Factory overhead69,430  

Bal., ? units, 45% completed?  

Cost per equivalent units of $1.50 for Direct Materials and $1.80 for Conversion Costs.

a. Based on the above data, determine the different costs listed below.

If required, round your interim calculations to two decimal places.

1. Cost of beginning work in process inventory completed this period$

2. Cost of units transferred to finished goods during the period$

3. Cost of ending work in process inventory$

4. Cost per unit of the completed beginning work in process inventory (Rounded to the nearest cent.)$

b. Did the production costs change from the preceding period?
Yes

c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?
Increase

Answer 1

	Physical units	Materials	Conversion
Work in Process Beginning	6000
Started during the period	141000
Total Units to account for	147000
Work in Process Beginning	6000	0	1800
Units started and completed	132000	132000	132000
Units transferred to next department	138000	132000	133800
Ending Work in Process :	9000	9000	4050
Total Units Accounted for	147000
Equivalent units		141000	137850
	Materials	Conversion	Total
Cost added during the period	$          211,500	$            248,130	$         459,630
Equivalent units of Production	141000	137850
Cost per equivalent unit	$                1.50	$                   1.80	$                3.30
	Materials	Conversion	Total
Inventory in Process, Beginning			$            16,140
Costs incurred in January			$         459,630
Total Costs accounted for			$         475,770
	Materials	Conversion	Total
Units Completed and transferred out
Cost of Beginning Work in Process			$            16,140
Cost of work on Beginning Work in Process	$                     -	$                 3,240	$              3,240
Total Cost of Beginning WIP			$            19,380
Units started and completed	132000	132000
Cost per equivalent unit	$                1.50	$                   1.80
Cost of units started and completed	$          198,000	$            237,600	$         435,600
Cost of units transferred out	$          198,000	$            237,600	$         454,980
	Materials	Conversion	Total
Ending work in Process Inventory
Equivalent units of Production	9000	4050
Cost per equivalent unit	$                1.50	$                   1.80
Cost of Ending work in Process Inventory	$            13,500	$                 7,290	$           20,790

a.
1. Cost of beginning work in process inventory completed this period = $3240, or $19380 for total cost of Beg WIP

2. Cost of units transferred to finished goods during the period = $454980

3. Cost of ending work in process inventory = $20790

4. Cost per unit of the completed beginning work in process inventory = $19380 / 6000 = $3.23 per unit

c.
Conversion Cost in beginning WIP = $16140 - 6000 x 1.50 = $7140
Conversion cost per unit in beginning WIP = $7140 / (6000 x 70%) = $1.70 per unit

It increased by $0.10 per unit