Question

Sheridan Company manufactures bowling balls through two processes: Molding and Packaging. In the Molding Department, the urethane, rubber, plastics, and other materials are molded into bowling balls. In the Packaging Department, the balls are placed in cartons and sent to the finished goods warehouse. All materials are entered at the beginning of each process. Labor and manufacturing overhead are incurred uniformly throughout each process. Production and cost data for the Molding Department during June 2020 are presented below.

Production Data		June
Beginning work in process units		0
Units started into production		28,160
Ending work in process units		2,560
Percent complete—ending inventory		40	%

Cost Data
Materials		$253,440
Labor		68,608
Overhead		144,384
Total		$466,432

Prepare a schedule showing physical units of production.

Physical units
Units to be accounted for
Work in process, June 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, June 30
Total units

Determine the equivalent units of production for materials and conversion costs.

		Materials		Conversion Costs
Total equivalent units

Compute the unit costs of production.

		Materials		Conversion Costs		Total Unit Cost
Unit Costs		$		$		$

Determine the costs to be assigned to the units transferred out and in process for June.

Transferred out		$
Work in process, June 30		$

Quantities		Physical Units		Materials		Conversion Costs
Units to be accounted for
Work in process, June 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, June 30
Total units

Costs				Materials		Conversion Costs		Total
Unit costs
Total Costs				$		$		$
Equivalent units
Unit costs				$		$		$
Costs to be accounted for
Work in process, June 1								$
Started into production
Total costs								$

Cost Reconciliation Schedule
Costs accounted for
Transferred out								$
Work in process, June 30
Materials						$
Conversion costs
Total costs								$

Answer 1

a	Physical units
	Units to be accounted for
	Work in process, June 1	0
	Started into production	28160
	Total units	28160
	Units accounted for
	Transferred out	25600	(28160-2560)
	Work in process, June 30	2560
	Total units	28160
		Materials	Conversion Costs
b	Units transferred out	25,600	25,600
	Work in process, June 30
	2,560 X 100%	2,560
	2,560 X 40%		1,024
	Total equivalent units	28,160	26,624
c		Unit Costs
	Materials	$9.00 ($253,440 ÷ 28,160)
	Conversion Costs	$8.00 ($212,992 ÷ 26,624)	(68608+144384 = 212992) is conversion cost
	Total unit cost	$17.00 ($9.00 + $8.00)
d	Costs accounted for
	Transferred out (25,600 X $17.00)		$                 435,200
	Work in process, June 30
	Materials (2,560 X $9.00)	$                                  23,040
	Conversion costs (1,024 X $8.00)	8,192	31,232
	Total costs		$                 466,432
e	Quantities	Physical		Conversion
		Units	Materials	Costs
	Units to be accounted for
	Work in process, June 1	0
	Started into production	28160
	Total units	28160
	Units accounted for
	Transferred out	25600	25600	25600
	Work in process, June 30	2560	2560	1024	(2560 x 40%)
	Total units	28160	28160	26624
	Costs			Conversion
			Materials	Costs	Total
	Unit costs
	Total Costs	(a)	$          253,440	$     212,992	$     466,432
	Equivalent units	(b)	28,160	26,624
	Unit costs (a) ÷ (b)		$                     9	$                8	$              17
	Costs to be accounted for
	Work in process, June 1				$               -
	Started into production				466,432
	Total costs				$     466,432
	Cost Reconciliation Schedule
	Costs accounted for
	Transferred out	(25600 x $17)			$     435,200
	Work in process, June 30
	Materials	(2560 x $9)		$       23,040
	Conversion costs	(1024 x $8)		8,192	31,232
	Total costs				$     466,432