Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,500 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $647,100 in total. The ending work in process inventory in January consisted of 3,000 units, which were 50% complete with respect to materials and 30% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows:

	Materials			Labor			Overhead
Cost per equivalent unit	$	13.70		$	3.30		$	7.20

Required:

1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.

2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.

3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.

4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Answer 1

a)
	Material	Labor	Overhead
Units in ending inventory	3,000	3,000	3,000
Percent completed	50.00%	30.00%	30.00%
Equivalent units of production	1,500	900	900
b)
	Material	Labor	Overhead	Total
Ending work in process inventory:
Equivalent units of production	1,500	900	900
Cost per equivalent unit	$13.70	$3.30	$7.20
Cost of ending work in process inventory	$20,550.00	$2,970.00	$6,480.00	$30,000.00
c)
	Material	Labor	Overhead	Total
Units transferred to the next department	25500	25500	25500
Equivalent units of production	$13.70	$3.30	$7.20
Cost of units completed and transferred out	$349,350.00	$84,150.00	$183,600.00	$617,100.00
d)
Cost reconciliation:
Total cost to be accounted for	$647,100.00
Costs accounted for as follows
Cost of ending work in process inventory	$30,000.00
Cost of units completed and transferred out	$617,100.00
Total cost accounted for	$647,100.00