Question

The inventory at May 1 and the costs charged to Work in Process -- Department B during May for Star Company are as follows:

8,000 Units, 75% Completed ---- $65,600

From Department A, 43,500 Units ---- $78,300

Direct Labor ---- $292,400

Factory Overhead ---- $107,100

During May, all direct materials are transferred from Department A, the units process at May 1 were completed, and of the 43,500 units entering the department, all were completed except 9,000 units which were 2/3 the department. Inventories are costed by the first in, first out method.

Prepare a cost of production report for May!

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				8,000
Add: Units Started in Process				43,500
Total Units to account for:				51,500
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				8000
Units started and completed				34,500
Ending Work in Process				9,000
Total Units to be accounted for:				51,500
Equivalent Units:
			Transferred In cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			0%	0	25%	2,000
Units started and completed			100%	34,500	100%	34,500
Ending Work in Process			100%	9,000	67%	6,000
Total Equivalent units				43,500		42,500
COST PER EQUIVALENT UNIT:
			Transferred In		Conversion
Total cost added during the year			78,300		399,500
Equivalent Units			43,500		42,500
Cost per Equivalent unit			1.8		9.4
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (8000 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					65600
Transferred In cost			0	1.8	0
Conversion Cost			2,000	9.4	18800
Cost of units completed from Beg WIP					84400
Units started and Transferred out (34500 units)
			Equivalent unit	Cost per EU	Total Cost
Transferred in cost			34,500	1.8	62100
Conversion Cost			34,500	9.4	324300
Total Cost of Units completed and transferred out:					386400
Ending Work in process (9,000 units)
			Equivalent unit	Cost per EU	Total Cost
Transferred in Cost			9,000	1.8	16200
Conversison Cost			6,000	9.4	56400
Total cost of Ending Work in process:					72,600