Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,200 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $669,445 in total. The ending work in process inventory in January consisted of 3,500 units, which were 70% complete with respect to materials and 50% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Materials Labor Overhead Cost per equivalent unit $ 13.10 $ 3.60 $ 7.80 Required: 1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month. 2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January. 3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January. 4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Answer 1

1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.

	Material	Labour	Oveerhead
Equivalent unit of ending work in prcess	3500*70%=2450	3500*50%=1750	3500*50%=1750

2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.

	Material	Labour	Overhead	Total
Cost of ending work in process	2450*13.10=32095	1750*3.60=6300	1750*7.8=13650	52045

3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.

	Material	Labour	Overhead	Total
Cost of units transferred out	25200*13.10=330120	25200*3.6=90720	25200*7.80=196560	617400

4. Prepare a cost reconciliation for January.

Cost to be accounted as	669445
Cost accounted as follows
Cost of units transferred out	617400
Ending work in process	52045
Total cost to be accounted for	669445