Question

The ledger of American Company has the following work in process account.

Work in Process—Painting
5/1	Balance	3,590	5/31	Transferred out	?
5/31	Materials	5,160
5/31	Labor	2,530
5/31	Overhead	1,380
5/31	Balance	?

Production records show that there were 400 units in the beginning inventory, 30% complete, 1,600 units started, and 1,700 units transferred out. The beginning work in process had materials cost of $2,040 and conversion costs of $1,550. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

Instructions

(a)  

How many units are in process at May 31?

(b)  

What is the unit materials cost for May?

(c)  

What is the unit conversion cost for May?

(d)  

What is the total cost of units transferred out in May?

(e)  

What is the cost of the May 31 inventory?

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				400
Add: Units Started in Process				1,600
Total Units to account for:				2,000
UNITS TO BE ACCOUNTED FOR:
Units started and completed				1,700
Ending Work in Process				300
Total Units to be accounted for:				2,000
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units started and completed			100%	1,700	100%	1,700
Ending Work in Process			100%	300	30%	90
Total Equivalent units				2,000		1,790
TOTAL COST TO ACCOUNT FOR:
			Material		Conversion
Beginning work in Process			2,040		1,550
Cost Added during May			5,160		3,910
Total Cost to account for:			7,200		5,460
Total Cost to account for:					12,660
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			7,200		5,460
Equivalent Units			2,000		1,790
Cost per Equivalent unit			3.6		3.05
TOTAL COST ACCOUNTED FOR:
Units started and Transferred out (1700 units)
			Equivalent unit	Cost per EU	Total Cost
Material			1,700	3.6	6120
Conversion Cost			1,700	3.05	5185
Total Cost of Units completed and transferred out:					11305
Ending Work in process (300 units)
			Equivalent unit	Cost per EU	Total Cost
Material			300	3.6	1080
Conversison Cost			90	3.05	274.5
Total cost of Ending Work in process:					1,355
Req a: Ending in process units: 300 units
Req b: Material unit cost: 3.60
Req c: Conversion cost per unit: 3.05
Req d: Total cost of Units transferrd out: $ 11305
Req e: Total cost of ending WIP: $ 1355