Question

Two part question:

1) The computation of the cost per equivalent unit is explained in a

a) Job Order Cost Sheet

b) Materials Requisition Report

c) Cost of Production Report

d) Transfer-in Cost Report

2) Cantor Company had 400 units of product in its Work in Process inventory at the beginning of the period. During the period Cantor started 3,900 additional units of product. At the end of the period Cantor had 300 units of product in the Work in Process inventory. Cantor estimated the ending Work in Process inventory was 40% complete. The beginning Work in Process inventory cost was $1,840. Cantor added $130,000 of product costs to Work in Process during the period. What is the ending balance in the Work in Process account?

a) $9,600

b) $3,840

c) $105,600

d) $128,000

Answer 1

	Units	% of completion	Equivalent units
Beginning work in process	400	100%	400
Units started and completed during the period	3,600	100%	3,600
Ending work in process	300	40%	120
TOTAL	4,300		4,120
	$
Cost of beginning inventory	1,840
Add: Costs added during the period	130,000
Total costs	131,840
Cost per Equivalent unit = $ 131,840 / 4,120 units = $ 32 per unit
Cost of Ending work in process = 120 units x $ 32 = $ 3,840