Question

In: Accounting

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta...

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.)

Solutions

Expert Solution

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

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