Question

Units of production data for the two departments of Continental Cable and Wire Company for November of the current fiscal year are as follows:

	Drawing Department	Winding Department
Work in process, November 1	7,200 units, 20% completed	1,500 units, 90% completed
Completed and transferred to next processing department during November	98,600 units	98,100 units
Work in process, November 30	5,500 units, 70% completed	2,000 units, 30% completed

a. If all direct materials are placed in process at the beginning of production, determine the direct materials and conversion equivalent units of production for November for the Drawing Department. If an amount is zero, enter in "0".

Drawing Department
Direct Materials and Conversion Equivalent Units of Production
For November
	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
Inventory in process, November 1
Started and completed in November
Transferred to Winding Department in November
Inventory in process, November 30
Total

b. If all direct materials are placed in process at the beginning of production, determine the direct materials and conversion equivalent units of production for November for the Winding Department. If an amount is zero, enter in "0".

Winding Department
Direct Materials and Conversion Equivalent Units of Production
For November
	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
Inventory in process, November 1
Started and completed in November
Transferred to finished goods in November
Inventory in process, November 30
Total

Answer 1

	Drawing	Department
Direct materials	and conversion	equivalent units	of production
	For	November
	Whole units	Direct material equivalent units	conversion equivalent units
A) Inventory in process, November 1	7200	0	5760 (7200x80%)
B) Started and completed in November (C-A)	91400	91400	91400
C) Transferred to finished goods in november	98600
D) Inventory in process, November 30	5500	5500	3850
E) Total (A+B+D)	104100	96900	101010

Thus in respect of direct material 96900 units are completed and in respect of conversion cost 101010 units are completed

Notes :-

1. It should be noted that out of total units transferred to finished goods in November amounting to 98600 units, first opening WIP will be completed and those will be transferred and then remaining from those which are started in November only which are 98600-7200=91400.

2. Since, direct material is poured in the beginning only for 100%, thus in the beginning WIP of 7200 which is already 20% complete direct material would have already been poured in previous year thus for beginning inventory 0 is taken for direct material. In respect of conversion cost we know that it was already 20% completed in previous period thus for this period remaining 80% will be worked on and that's why we have taken as 7200x80%.

3 .For closing WIP, in respect of direct material which is 5500 and 70% complete, we know that all direct material is entered in the beginning itself and thus for direct material whole 5500 is taken. And since for conversion cost in this year it is 70% completed thus 5500x70% is used.

b .

	Winding	Department
Direct material	and conversion	equivalent units	of production
	For	November
	Whole units	Direct material equivalent units	conversion equivalent units
A) Inventor in process, November 1	1500	0	150 (1500x10%)
B) Started and completed in November (C-A)	96600	96600	96600
C) Transferred to finished goods in November	98100
D) Inventory in process, November 30	2000	2000 (2000x100%)	600 (2000x30%)
Total		98600	97350

Thus, in wiring department in respect of direct material number of units completed is 98600 and in respect of conversion cost 97350 units are completed

Notes :-

1. It should be noted that out of total units transferred to finished goods in Nov amounting to 98100 units, first opening WIP will be completed and those will be transferred and then remaining from those which are started in Nov only which is 98100-1500 96600.

2. Since, direct material is poured in the beginning only for 100% thus, in the beginning WIP of 1500 which is already 90% completed direct material would have been already poured in previous period thus for beginning inventory 0 is taken for direct material. In respect of conversion cost we know that, it was already 90% completed in previous period thus for this period remaining 10% will be worked on and thus that's why we have taken it as 1500x10%.

3 . For closing WIP in respect of direct material which is 2000 and 30% complete, we know that direct material is poured in the beginning itself and thus for direct material whole 2000 units is taken. And since for this period, in respect of conversion cost is 30%completed thus 2000x30% is used.