Question

In: Accounting

The following information concerns production in the Forging Department for November. All direct materials are placed...

The following information concerns production in the Forging Department for November. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $72,600 of direct materials.

ACCOUNT Work in Process—Forging Department ACCOUNT NO.
Date Item Debit Credit Balance
Debit Credit
Nov. 1 Bal., 6,000 units, 50% completed 80,400
30 Direct materials, 55,000 units 654,500 734,900
30 Direct labor 65,230 800,130
30 Factory overhead 90,074 ? 890,204
30 Goods finished, ? units ?
30 Bal., 4,800 units, 90% completed ?

Cost per equivalent units of $11.90 for Direct Materials and $2.70 for Conversion Costs.

Based on the above data, determine each of the following amounts.

If required, round your interim calculations to two decimal places. Round final answers (a-c) to the nearest dollar.

a. Cost of beginning work in process inventory completed in November.
$

b. Cost of units transferred to the next department during November.
$

c. Cost of ending work in process inventory on November 30.
$

d. Costs per equivalent unit of direct materials and conversion included in the November 1 beginning work in process. If required, round your answers to two decimal places.

Direct materials cost per equivalent unit $
Conversion cost per equivalent unit $

e. The November increase or decrease in costs per equivalent unit for direct materials and conversion from the previous month. If required, round your answers to two decimal places.

Increase or Decrease Amount
Change in direct materials cost per equivalent unit Decrease $
Change in conversion cost per equivalent unit

Solutions

Expert Solution

UNITS TO ACCOUNT FOR:
Beginning Work in Process units 6,000
Add: Units Started in Process 55,000
Total Units to account for: 61,000
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP 6000
Units started and completed 50,200
Ending Work in Process 4,800
Total Units to be accounted for: 61,000
Equivalent Units:
Material Cost Conversion
% Completion Units % Completion Units
Units completed from Beg. WIP 0% 0 50% 3,000
Units started and completed 100% 50,200 100% 50,200
Ending Work in Process 100% 4,800 90% 4,320
Total Equivalent units 55,000 57,520
COST PER EQUIVALENT UNIT:
Material Conversion
Total cost added during the year 654,500 155,304
Equivalent Units 55,000 57,520
Cost per Equivalent unit 11.9 2.7
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (6000 units)
Equivalent unit Cost per EU Total Cost
Beginning Cost 80400
Material 0 11.9 0
Conversion Cost 3,000 2.7 8100
Cost of units completed from Beg WIP 88500
Units started and Transferred out (50200 units)
Equivalent unit Cost per EU Total Cost
Material 50,200 11.9 597380
Conversion Cost 50,200 2.7 135540
Total Cost of Units completed and transferred out: 732920
Ending Work in process (4800 units)
Equivalent unit Cost per EU Total Cost
Material 4,800 11.9 57120
Conversison Cost 4,320 2.7 11664
Total cost of Ending Work in process: 68,784
Req a:
Cost of Beginning WIP complteed: 88500
Req b:
Cost of Units transferred outv (88500+732920) = 821420
Req c:
Cost of Ending inventory: $ 68784
Req d:
Total beginning WIP cost 80400
Less: Material cost 72600
Converison cost 7800
Material per unit (72600/6000): 12.1
Conversion (7800/3000) 2.6
Rreq e:
Change in material cost per unit Decrease 0.20
Change in conversion cost perr unit Increase 0.10

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