Question

A).

Equivalent Units of Materials Cost

The Filling Department of Eve Cosmetics Company had 3,200 ounces in beginning work in process inventory (60% complete). During the period, 53,000 ounces were completed. The ending work in process inventory was 2,700 ounces (40% complete).

What are the total equivalent units for direct materials if materials are added at the beginning of the process?

B).

artment of Eve Cosmetics Company had 2,900 ounces in beginning work in process inventory (80% complete). During the period, 47,500 ounces were completed. The ending work in process inventory was 2,400 ounces (10% complete).

What are the total equivalent units for conversion costs?

If required, round to the nearest unit.

C).

Cost per Equivalent Unit

The cost of direct materials transferred into the Filling Department of Eve Cosmetics Company is $171,270. The conversion cost for the period in the Filling Department is $306,800. The total equivalent units for direct materials and conversion are 51,900 ounces and 59,000 ounces, respectively.

Determine the direct materials and conversion costs per equivalent unit. If required, round to the nearest cent.

Direct materials cost per equivalent unit:	$ per ounce
Conversion costs per equivalent unit:	$ per ounce

D).

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 Eve Cosmetics Company are $1.75 and $0.70, respectively. The equivalent units to be assigned costs are as follows:

	Equivalent Units
	Direct Materials		Conversion
Inventory in process, beginning of period	0		3,900
Started and completed during the period	55,000		55,000
Transferred out of Filling (completed)	55,000		58,900
Inventory in process, end of period	3,000		1,200
Total units to be assigned costs	58,000		60,100

The beginning work in process inventory had a cost of $2,610. Determine the cost of completed and transferred-out production and the ending work in process inventory. If required, round to the nearest dollar.

Completed and transferred-out production	$
Inventory in process, ending	$

E).

Process Cost Journal Entries

The cost of materials transferred into the Rolling Department of Keystone Steel Company is $574,400 from the Casting Department. The conversion cost for the period in the Rolling Department is $110,100 ($62,200 factory overhead applied and $47,900 direct labor). The total cost transferred to Finished Goods for the period was $689,600. The Rolling Department had a beginning inventory of $22,500.

a1. Journalize the cost of transferred-in materials.

a2. Journalize the conversion costs. If an amount box does not require an entry, leave it blank.

a3. Journalize the costs transferred out to Finished Goods.

b. Determine the balance of Work in Process—Rolling at the end of the period.
$

Answer 1

A . Equivalent units of material cost

	Units	Equivalent units Material
		% of completion	Units
Units started and completed (53,000 - 3,200)	49,800	100 %	49,800
Ending WIP	2,700	100%	2,700
Total equivalent units for material			52,500

As direct materials are added in the beginning of the process it means they are 100% completed as to materials.

B. Equivalent units for conversion cost:

	Units	Equivalent units Conversion cost
		% of completion	Units
Beginning WIP	2,900	20%	580
Units started and completed (47,500 - 2,900)	44,600	100%	44,600
Ending WIP	2,400	10%	240
Total equivalent units			45,420

C. Cost per equivalent units:

	Direct material	Conversion cost
Total cost (A)	$171,270	$306,800
Total equivalent units (B)	51,900	59,000
Cost per equivalent units (A) / (B)	$3.3	$5.2

Direct material cost per equivalent unit	$3.3 per ounce
Conversion cost per equivalent unit	$5.2 per ounce

D. Cost of units transferred out and ending WIP:

Particulars	Equivalent units	Cost per unit	Total cost
Completed and transferred out production:
Direct material	55,000	$1.75	$96,250
Conversion cost	58,900	$0.70	$41,230
Add: Beginning WIP inventory			$2,610
Total cost of completed and transferred out production			$140,090
Inventory in process, Ending:
Direct material	3,000	$1.75	$5,250
Conversion cost	1,200	$0.70	$840
Total cost of inventory in process, ending			$6,090

E. Process cost journal entries:

a1.

General journal	Debit	Credit
Work in process - Rolling	$574,400
Work in process - Casting		$574,400
(To record transfer of material from casting department)

a2.

General journal	Debit	Credit
Work in process - Rolling	$110,100
Factory overhead		$62,200
Wages payable		$47,900
(To record conversion cost for the period)

a3.

General journal	Debit	Credit
Finished goods	$689,600
Work in process - Rolling		$689,600
(To record transfer of goods to finished goods from rolling department)

b.

Ending WIP - Rolling Department = $22,500 + 574,400 + 110,100 - 689,600 = $17,400