Question

Cost of Units Completed and in Process

The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.

Work in Process—Assembly Department
Bal., 7,000 units, 65% completed	24,150	To Finished Goods, 161,000 units	?
Direct materials, 165,000 units @ $1.5	247,500
Direct labor	380,700
Factory overhead	148,100
Bal. ? units, 80% completed	?

Cost per equivalent units of $1.50 for Direct Materials and $3.20 for Conversion Costs.

a. Based on the above data, determine the different costs listed below.

If required, round your interim calculations to two decimal places.

1. Cost of beginning work in process inventory completed this period.	$
2. Cost of units transferred to finished goods during the period.	$
3. Cost of ending work in process inventory.	$
4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent.	$

b. Did the production costs change from the preceding period? yes or no

c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				7,000
Add: Units Started in Process				165,000
Total Units to account for:				172,000
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				7000
Units started and completed				154,000
Ending Work in Process				11,000
Total Units to be accounted for:				172,000
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			0%	0	35%	2,450
Units started and completed			100%	154,000	100%	154,000
Ending Work in Process			100%	11,000	80%	8,800
Total Equivalent units				165,000		165,250
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			247,500		528,800
Equivalent Units			165,000		165,250
Cost per Equivalent unit			1.5		3.2
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (7000 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					24150
Material			0	1.5	0
Conversion Cost			2,450	3.2	7840
Cost of units completed from Beg WIP					31990
Units started and Transferred out (154000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			154,000	1.5	231000
Conversion Cost			154,000	3.2	492800
Total Cost of Units completed and transferred out:					723800
Ending Work in process (11,000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			11,000	1.5	16500
Conversison Cost			8,800	3.2	28160
Total cost of Ending Work in process:					44,660
Req A;
Cost of beginning Wip completed					31990
Cost of units transferred to FG (723800+31990)					755790
Cost of ending WIP					44660
Cost per unt of Completed Beginning WIP (31990/7000)					4.57
Req B:
Yes, It has increased as witnessed that current cost per unit $4.70 and Beginning is low at $ 4.57
Req C:
Begininng cost of WIP					24150
Less: material cost (7000 units @ 1.50)					10500
Conversion cost					13650
Divide: Equivalent units of Conversion cost (7000*65%)					4550
Conversion cost per unit					3
Yes, the conversion cost pere unit has been increased from $ 3.00 to $ 3.20