Question

Brumby Supplies (BS) factures splashbacks. BS costing system uses two cost categories, direct materials and conversion costs. Each product must pass through Department A to complete production. Direct materials (DM) are added at the beginning of production. Conversion costs (CC) are incurred evenly throughout production.             Costs for Department A for June 2019 are:             Work in process, beginning inventory, direct materials                                                       $220,000             Work in process, beginning inventory, conversion costs                                                     $120,000             Direct materials costs added during June                                                                               $850,000             Conversion costs added during June                                                                                        $614,000              Data for Department A for June 2019 are:             Work in process, 1 June (Degree of completion: DM 100 %, CC 20%):                     3,000 units             Units started during June:                                                                                                4,500 units             Work in process, 30 June (Degree of completion: DM 100 %, CC 40%):                  2,000 units Required: ( all answers should be supported by calculation: Round to two decimal places) a. How many units were completed and transferred out in June? (2.5 marks b. Assume BS uses the weighted-average process costing method. What were the costs per equivalent unit for DM and CC in June? (2.5 marks) c. Assume BS uses the weighted-average process costing method. What were the total costs assigned to the work in process inventory at the end of June?     (2.5 marks) d. Assume BS uses the weighted-average process costing method. What were the total costs assigned to the units completed and transferred out in June? ( 2.5 marks) -

Answer 1

a) units completed and transferred out =Beginning WIP +Started during the period -Ending WIP

                         = 3000+4500 - 2000

                         = 5500 UNITS

B)Calculation of equivalent unit:

	Material	conversion
Completed and transferred out	5500	5500
Ending work in process inventory	2000*100%=2000	2000*40%= 800
Equivalent unit	7500	6300

	Material	conversion
Beginning WIP cost	220000	120000
Current period cost	850000	614000
Total cost to account for [A]	1070000	734000
Equivalent unit [B]	7500	6300
Cost per equivalent unit [A/B]	1070000/7500=$142.67	734000/6300=$ 116.51

C)

	Equivalent unit *cost per equivalent unit	cost of work in process at end
Material	2000*142.67= 285340
conversion	800*116.51= 93208
Total cost of ending work in process		378548

d)

	Equivalent unit *cost per equivalent unit	cost of completed and transferred out
Material	5500*142.67= 784685
conversion	5500*116.51= 640805
Total cost of units completed and transferred out		1425490