Question

The Assembly Department of

Power MotorsPower Motors

began

SeptemberSeptember

with no work in process inventory. During the month, production that cost

$39,860

(direct materials,

$9,900 ,

and conversion costs,

$29,960 )

was started on

23,000

units.

PowerPower

completed and transferred to the Testing Department a total of

15,000

units. The ending work in process inventory was

37.5%

complete as to direct materials and

80%

complete as to conversion work.

---------

1.	Compute the equivalent units for direct materials and conversion costs.
2.	Compute the cost per equivalent unit.
3.	Assign the costs to units completed and transferred out and ending work in process inventory.
4.	Record the journal entry for the costs transferred out of the Assembly Department to the Testing Department.
5.	Post all of the transactions in the "Work in Process Inventorylong dash— Assembly" T-account. What is the ending balance?

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				0
Add: Units Started in Process				23,000
Total Units to account for:				23,000
UNITS TO BE ACCOUNTED FOR:
Units started and completed				15,000
Ending Work in Process				8,000
Total Units to be accounted for:				23,000
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units started and completed			100%	15,000	100%	15,000
Ending Work in Process			38%	3,000	80%	6,400
Total Equivalent units				18,000		21,400
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			9,900		29,960
Equivalent Units			18,000		21,400
Cost per Equivalent unit			0.55		1.4
TOTAL COST ACCOUNTED FOR:
Units started and Transferred out (15000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			15,000	0.55	8250
Conversion Cost			15,000	1.4	21000
Total Cost of Units completed and transferred out:					29250
Ending Work in process (8000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			3,000	0.55	1650
Conversison Cost			6,400	1.4	8960
Total cost of Ending Work in process:					10,610
Req 1:			Equivalent Units
	Material		18000
	Conversion		21400
Req 2			Cost per Units
	Material		0.55
	Conversion		1.4
	Total cost		1.95
Req 3:
Cost of Goods completed: $ 29250
Cost of Ending Inventory: $ 10610
Req 4:
Journal entry:
Work in Process-Testing account Dr.				29250
Work in process- Assembly Account					29250
Req 5:
WORK IN PROCESS INVENTORY-ASSEMBLY
Balance		0	WIP-Testing		29,250
Raw material Inv.		9,900
Wages and Oh		29,960
Balance		10,610