Question

Costs per Equivalent Unit and Production Costs

The following information concerns production in the Forging Department for September. 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 $52,070 of direct materials.

ACCOUNT Work in Process—Forging Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
Sept.	1	Bal., 4,100 units, 30% completed					54,899
	30	Direct materials, 37,000 units	458,800				513,699
	30	Direct labor	38,860				552,559
	30	Factory overhead	53,660		?		606,219
	30	Goods finished, ? units					?
	30	Bal., 3,300 units, 60% completed					?

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 September.
$

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

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

d. Costs per equivalent unit of direct materials and conversion included in the September 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 September 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		$
Change in conversion cost per equivalent unit		$

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				4,100
Add: Units Started in Process				37,000
Total Units to account for:				41,100
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				4100
Units started and completed				33,700
Ending Work in Process				3,300
Total Units to be accounted for:				41,100
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			0%	0	70%	2,870
Units started and completed			100%	33,700	100%	33,700
Ending Work in Process			100%	3,300	60%	1,980
Total Equivalent units				37,000		38,550
TOTAL COST TO ACCOUNT FOR:
			Material		Conversion
Total cost added during the year			458,800		92,520
Equivalent Units			37,000		38,550
Cost per Equivalent unit			12.4		2.4
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (4100 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					54899
Material			0	12.4	0
Conversion Cost			2,870	2.4	6888
Cost of units completed from Beg WIP					61787
Units started and Transferred out (33700 units)
			Equivalent unit	Cost per EU	Total Cost
Material			33,700	12.4	417880
Conversion Cost			33,700	2.4	80880
Total Cost of Units completed and transferred out:					498760
Ending Work in process (3,300 units)
			Equivalent unit	Cost per EU	Total Cost
Material			3,300	12.4	40920
Conversison Cost			1,980	2.4	4752
Total cost of Ending Work in process:					45,672
Req a:
Cost of beginning WIP complteed: 61787
Req b:
Cost of units transferred to next departmente					560547
	(61787+498760)
Req c: Cost of Ending WIP:					45672
Req d:
Total cost of Beg. Wip				54899
Less: Material				52070
Conversion cost				2829
Divide: Equivalen t unitss of conversion				1230
Convrsion cost per unit				2.3
Material cost per unit (52070/4100)				12.7
Req e:				Inc/Dec	Amount
Change in material cost per unit				Increase	0.1
Change in Conversion cost per unit				Decrease	0.3