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 $736,968 in total. The ending work in process inventory in January consisted of 3,800 units, which were 70% complete with respect to materials and 50% 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	$	14.30		$	5.00		$	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

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

	Material	Labour	Overhead
Ending work in process equivalent unit	3800*70% = 2660	3800*50% = 1900	3800*50% = 1900

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	2660*14.30 = 38038	1900*5 = 9500	1900*7.2 = 13680	61218

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 out	25500*14.30 = 364650	25500*5 = 127500	25500*7.2 = 183600	675750

4. Prepare a cost reconciliation for January.

Cost to be accounted for	736968
Cost accounted as
Cost of units transferred out	675750
Cost of ending work in process	61218
Total cost accounted as	736968