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 30 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					600			380			270
Units completed in Department A					420			260			190
Units completed in Department B								225			165
Materials	$	399,500		$	60,000		$	123,500		$	216,000
Conversion costs:
Department A	$	319,800
Department B		53,250
Total conversion costs	$	373,050

Required:

a. What is the unit cost of each model transferred to finished goods in April?

X-10_______

X-20_______

X-40_______

b. What is the balance of work-in-process inventory on April 30 for Department A? Department B?

Answer 1

Req A
Unit cost
X-10	425.00
X-20	775.00
X-40	1250.00
Req b
Work In Process Inventory
Department A	158,050
Department B	55,375

Working Notes: (Req A)
Product	Material Cost (1)	No. of Units (2)	Cost per Units (3) = (1)/(2)
X-10	60000	600	100
X-20	123500	380	325
X-40	216000	270	800

Conversion cost per equivalent Units - Dept.A
	Physical Units	Conversion cost
		Eq. Units
Flow of Units:
Units to be accounted for:
Beginning WIP inventory	0
Units started this period	1250
Total Units accounted for:	1250
Units accounted for:
Completed and transferred out	870	870
Units in ending Inventory	380	114
Total Units accounted for:	1250	984
	Total	Conversion Cost
Cost to be accounted for:
Cost in beginning WIP	0	0
Current Period costs	319800	319800
Total cost to be accounted for:	319800	319800
Cost per equivalent Units
Conversion cost		325.00
Conversion cost per equivalent Units - Dept. B
	Physical Units	Conversion cost
		Eq. Units
Flow of Units:
Units to be accounted for:
Beginning WIP inventory	0
Units started this period	450
Total Units accounted for:	450
Units accounted for:
Completed and transferred out	390	390
Units in ending Inventory	60	36
Total Units accounted for:	450	426
	Total	Conversion Cost
Cost to be accounted for:
Cost in beginning WIP	0	0
Current Period costs	53250	53250
Total cost to be accounted for:	53250	53250
Cost per equivalent Units
Conversion cost		125.00

Cost of Units Transferred to Finished Goods	X-10	X-20	X-40
Unit Material Cost	100	325	800
Department A Conversion cost	325.00	325.00	325.00
Department B Conversion cost		125.00	125.00
Total	425.00	775.00	1250.00
Working Note(Req 2:)
WIP Ending Inventory balance
Department A
Material Cost	No. of Units	Unit Cost	Total Cost
X-10	180	100	18,000
X-20	120	325	39,000
X-40	80	800	64,000
Total material cost			121,000
Conversion costs	114	325.00	37,050
Total			158,050
Department B
Material Cost	No. of Units	Unit Cost	Total Cost
X-20	35	325	11,375
X-40	25	800	20,000
Total material cost			31,375
Conversion costs:
From Department A	60	325.00	19,500
From Department B	36	125.00	4,500
Total Conversion Cost			24,000
Total			55,375