Question

Chapter 20: PE 20-6A

cost of units transferred out and ending work in process

The costs per equivalent unit of direct materials and conversion in the filling department of Lilac Skin Care Company are $ 0.45 and $0.15, respectively. The equivalent units to be assigned costs are as follows:

                                                                                                                      Equivalent Units     

Direct Materials    Conversion

Inventory in process beginning of period 0 1,200

Started and completed during the period 38,000 38,800

Transferred out of filling(completed)                                                    38,800                   40,000

Inventory in the process, end of period 6200 2480

total units to be assigned costs 45,000 42480

The beginning work in process inventory had a cost $25,000. Determine the cost of completed and transferred out production and the ending work in process inventory.

Answer 1

Solution:

Cost of units transferred out:
	Equivalent Units	Cost per Eq. Unit	Total Cost
Partially completed beginning work in process
Direct materials	0	$0.45	$0
Conversion	1,200	$0.15	$180
Cost incurred during the period to complete the partially completed units from beg wip			$180
Plus: Beginning work in process inventory cost			$25,000
Total Cost of Partial Completed Beginning work in process (A)			$25,180
Started and Completed Units
Direct materials	38,800	$0.45	$17,460
Conversion	38,800	$0.15	$5,820
Total Cost of Units Started and Completed during the period (B)			$23,280
Total Cost of Completed and transferred out production Units (A+B)			$48,460

Total Cost of Completed and transferred out production Units = $48,460

Cost of Ending Work In Process

	Equivalent Units	Cost per Eq. Unit	Total Cost
Cost of Ending Work In Process Inventory:
Direct Materials	6200	$0.45	$2,790
Conversion	2480	$0.15	$372
Total Cost assigned to Ending work in process inventory			$3,162

Total Cost assigned to Ending work in process inventory= $3,162