Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,200 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $696,316 in total. The ending work in process inventory in January consisted of 3,300 units, which were 60% complete with respect to materials and 40% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows:

Cost per equivalent unit

Materials- $ 12.60

Labor- $ 4.90

Overhead- $ 7.50

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

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

	Whole unit	%	EUP-material	%	Eup-Labour	%	EUP-overhead
Ending work in process	3300	60%	1980	40%	1320	40%	1320

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

	Material	Labour	Overhead	Total
Cost of ending work in process	1980*12.60 = 24948	1320*4.9 = 6468	1320*7.5 = 9900	41316

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

	Material	Labour	Overhead	Total
Cost of units transferred to next department	26200*12.60 = 330120	26200*4.9 = 128380	26200*7.5 = 196500	655000

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

Cost to be accounts for
Cost of beginning work in process and cost added	696316
Total cost to be accounted for	696316
Cost accounted as
Cost of units transferred out	655000
Cost of ending work in process	41316
Total cost accounted as	696316