Question

Ch 17#13

Costs per Equivalent Unit and Production Costs

The following information concerns production in the Forging Department for November. 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 $91,800 of direct materials.

ACCOUNT Work in Process—Forging Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
Nov.	1	Bal., 9,000 units, 30% completed					101,520
	30	Direct materials, 82,000 units	811,800				913,320
	30	Direct labor	133,860				1,047,180
	30	Factory overhead	184,858		?		1,232,038
	30	Goods finished, ? units					?
	30	Bal., 7,200 units, 70% completed					?

Cost per equivalent units of $9.90 for Direct Materials and $3.70 for Conversion Costs.

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 November.
$

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

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

d. Costs per equivalent unit of direct materials and conversion included in the November 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 November 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				9,000
Add: Units Started in Process				82,000
Total Units to account for:				91,000
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				9000
Units started and completed				74,800
Ending Work in Process				7,200
Total Units to be accounted for:				91,000
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			0%	0	70%	6,300
Units started and completed			100%	74,800	100%	74,800
Ending Work in Process			100%	7,200	70%	5,040
Total Equivalent units				82,000		86,140
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			811,800		318,718
Equivalent Units			82,000		86,140
Cost per Equivalent unit			9.9		3.7
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (9000 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					101520
Material			0	9.9	0
Conversion Cost			6,300	3.7	23310
Cost of units completed from Beg WIP					124830
Units started and Transferred out (74800 units)
			Equivalent unit	Cost per EU	Total Cost
Material			74,800	9.9	740520
Conversion Cost			74,800	3.7	276760
Total Cost of Units completed and transferred out:					1017280
Ending Work in process (7200 units)
			Equivalent unit	Cost per EU	Total Cost
Material			7,200	9.9	71280
Conversison Cost			5,040	3.7	18648
Total cost of Ending Work in process:					89,928
Req a: cost of Beg WIP completed: $124830
Req b: Cost of Units transferred to next department (124830+1017280): $ 1142,110
Req c: Cost f Ending Inventory: $ 89928
Req d:
Cost per unit in beg WIP:
Material (91800/9000): $ 10.20 per unit
Conversion ($ 9720/2700): $ 3.60 per unit
Req e:
Change in direct material per unit				Decrease	0.3	per unit
Change in conversion cost per unit				Increase	0.1	per unit