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 20 percent complete in Department A and 50 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 460 370 240 Units completed in Department A 400 250 170 Units completed in Department B 230 155 Materials $ 346,750 $ 34,500 $ 120,250 $ 192,000 Conversion costs: Department A $ 282,750 Department B 40,250 Total conversion costs $ 323,000 Required: a. What is the unit cost of each model transferred to finished goods in April? 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	395.40
X-20	745.40
X-40	1220.40
Req b
Work In Process Inventory
Department A	119,525
Department B	31,464
Working Notes: (Req A)
Product	Material Cost (1)	No. of Units (2)	Cost per Units (3) = (1)/(2)
X-10	34500	460	75
X-20	120250	370	325
X-40	192000	240	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	1070
Total Units accounted for:	1070
Units accounted for:
Completed and transferred out	820	820
Units in ending Inventory	250	62.5
Total Units accounted for:	1070	882.5
	Total	Conversion Cost
Cost to be accounted for:
Cost in beginning WIP	0	0
Current Period costs	282750	282750
Total cost to be accounted for:	282750	282750
Cost per equivalent Units
Conversion cost		320.40
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	420
Total Units accounted for:	420
Units accounted for:
Completed and transferred out	385	385
Units in ending Inventory	35	17.5
Total Units accounted for:	420	402.5
	Total	Conversion Cost
Cost to be accounted for:
Cost in beginning WIP	0	0
Current Period costs	40250	40250
Total cost to be accounted for:	40250	40250
Cost per equivalent Units
Conversion cost		100.00
Cost of Units Transferred to Finished Goods	X-10	X-20	X-40
Unit Material Cost	75	325	800
Department A Conversion cost	320.40	320.40	320.40
Department B Conversion cost		100.00	100.00
Total	395.40	745.40	1220.40
Working Note(Req 2:)
WIP Ending Inventory balance
Department A
Material Cost	No. of Units	Unit Cost	Total Cost
X-10	60	75	4,500
X-20	120	325	39,000
X-40	70	800	56,000
Total material cost			99,500
Conversion costs	62.5	320.40	20,025
Total			119,525
Department B
Material Cost	No. of Units	Unit Cost	Total Cost
X-20	20	325	6,500
X-40	15	800	12,000
Total material cost			18,500
Conversion costs:
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