Question

Overton Company has gathered the following information:
Production:
Units in beginning work in process 20,000
Units started into production 164,000
Units in ending work in process 24,000
Percentage complete in ending work in process:
Conversion costs 60%
Materials 100%
Costs:
Direct materials $ 101,200
Direct labor 164,800
Overhead 184,000

Instructions:

to. Calculate the equivalent units of production for the material and the conversion costs.
b. Determine the unit cost of production.
C. Show the allocation of costs to the units transferred and in process.

Answer 1

Overton Company
Workings
Units reconciliation	Whole Units
Beginning work in process inventory	20,000.00
Add: Units started in the month	164,000.00
Less: Ending work in process inventory	24,000.00
Units completed and transferred out	160,000.00
Answer a	Whole Units	% Materials	EUP- Materials	% Conversion	EUP- Conversion
Units completed and transferred out	160,000.00	100%	160,000.00	100%	160,000.00
Ending work in process inventory	24,000.00	100%	24,000.00	60%	14,400.00
Equivalent units of production	184,000.00		184,000.00		174,400.00
Answer b	Materials	Conversion	Total
Total Costs	101,200.00	344,800.00	446,000.00
Equivalent units of production	184,000.00	174,400.00
Cost per Equivalent Unit of production	0.5500	1.98	2.53
Answer c	EUP	Cost per EUP	Total Cost
Costs of units transferred out
Direct Materials	160,000.00	0.5500	88,000.00
Conversion	160,000.00	1.9771	316,336.00
Total transferred out			404,336.00
Answer 1 c	EUP	Cost per EUP	Total Cost
Costs of ending work in process
Direct Materials	24,000.00	0.5500	13,200.00
Conversion	14,400.00	1.9771	28,470.00
Total costs of ending work in process			41,670.00
Total costs accounted for			446,006.00