Question

Unit Cost and Cost Assignment, Nonuniform Inputs

Loran Inc. had the following equivalent units schedule and cost for its fabrication department during September:

	Materials		Conversion
Units completed	180,000		180,000
Add: Units in ending WIP x Fraction complete	67,000		35,510
(67,000 x 53%)
Equivalent units of output	247,000		215,510
Costs:
Work in process, September 1:
Materials	$147,000
Conversion costs	7,875
Total	$154,875
Current costs:
Materials	$1,206,000
Conversion costs	430,980
Total	$1,636,980

Required:

1. Calculate the unit cost for materials, for conversion, and in total for the fabrication department for September. If required, round your answers to the nearest cent.

Unit materials cost	$
Unit conversion cost	$
Total unit cost	$

2. Calculate the cost of units transferred out and the cost of EWIP. Round unit cost value to the nearest cent in intermediate calculations. If required, round final answers to the nearest dollar.

Cost transferred out	$
Cost of ending work in process	$

Answer 1

Unit materials cost	5.48
Unit conversion cost	2.04
Total unit cost	7.51
Cost transferred out	1,352,535.91
Cost of ending work in process	439,319.09
Statement of Equivalent production
Particulars	Materials	Conversion	Total
Units completed	180,000.00	180,000.00
ending WIP	67,000.00	35,510.00
Equivalent Units	247,000.00	215,510.00
Opening WIP Costs	147,000.00	7,875.00	154,875.00
Current Month Costs	1,206,000.00	430,980.00	1,636,980.00
Total costs	1,353,000.00	438,855.00	1,791,855.00
Cost per Equivalent units	5.48	2.04	7.51
Units completed and transferred out	180,000.00	180,000.00
Cost transferred out	985,991.90	366,544.01	1,352,535.91
Ending WIP	67,000.00	35,510.00
Cost of ending work in process	367,008.10	72,310.99	439,319.09