Question

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., 2,000 units, 75% completed	10,000	To Finished Goods, 46,000 units	?
Direct materials, 47,000 units @ $2	94,000
Direct labor	139,600
Factory overhead	54,330
Bal. ? units, 20% completed	?

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

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?
Increase

Answer 1

UNITS TO ACCOUNT FOR:	Whole units
Beginning WIP	2000
Units introduced during the period	47000
Total units to account for	49000
UNITS ACCOUNTED FOR:		Equivalent Units
		Material	Conversion Cost
Beginning WIP completed during the period	2000	0	500
Units introduced and completed	44000	44000	44000
Total units completed and transferred out	46000	44000	44500
Ending WIP	3000	3000	600
Total units accounted for	49000	47000	45100
		Material Cost	Conversion Cost	Total Cost
Costs added during the period		94000	193930	287930
Cost per equivalent unit		2.00	4.30	6.30
COSTS TO ACCOUNT FOR:
Beginning WIP				10000
Costs added during the period		94000	193930	287930
		94000	193930	297930
COSTS ACCOUNTED FOR:
Beginning WIP cost				10000
Costs to complete beginning WIP		0	2150	2150
Cost of beginning WIP completed during the period		0	2150	12150
Cost of units introduced and completed during the period		88000	189200	277200
Cost of units transferred to finished goods during the period		88000	191350	289350
Cost of ending WIP		6000	2580	8580
Total costs accounted for		94000	193930	297930
a. Based on the above data, determine the different costs listed below.
1. Cost of beginning work in process inventory completed this period.	$     12,150.00
2. Cost of units transferred to finished goods during the period.	$ 2,89,350.00
3. Cost of ending work in process inventory.	$       8,580.00
4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent = 12150/2000	$             6.08
b. Did the production costs change from the preceding period?
Yes. (The average price of $6.08 at a-4 above, is different from the total cost per equivalent unit during the period of 6.30 per unit)
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?
Increase
(Beginning WIP material cost = 2000*2 = 4000
So Conversion cost = 10000-4000 = 6000
Previous cost per equivalent unit for conversion cost = 6000/1500 = $4.00
Current period conversion cost per equivalent unit is more at $4.30)