Question

The costs per equivalent unit of direct materials and conversion in the Rolling Department of Oak Ridge Steel Company are $2.75 and $2.80, respectively. The equivalent units to be assigned costs are as follows:

	Equivalent Units
	Direct Materials		Conversion
Inventory in process, July 1	0		1,800
Started and completed during July	46,000		46,000
Transferred out of Rolling (completed)	46,000		47,800
Inventory in process, July 31	3,000		1,200
Total units to be assigned costs	49,000		49,000

The beginning work in process inventory on July 1 had a cost of $1,210. Determine the cost of completed and transferred-out production, the ending work in process inventory, and the total costs assigned by the Rolling Department.

Completed and transferred-out production: $______

Inventory in process, ending: $_____

Total costs assigned by the Rolling Department: $____

Answer 1

Solution

Completed and transferred-out production: $ 261,550

Inventory in process, ending: $ 11,610

Total costs assigned by the Rolling Department: $ 273,160

Working

Cost per Equivalent Units AND Cost to be accounted for
	Material	Conversion	TOTAL
Cost incurred in Current Period	$ 134,750	$ 137,200	$ 271,950
Total Equivalent Units	49,000	49,000
Cost per Equivalent Units	$ 2.75	$ 2.80	$ 5.55
Cost of Beginning WIP			$ 1,210
Total cost to be accounted for	$ 273,160

.

Cost report [Including Reconciliation]
	Cost of	Units Transferred	47,800.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	-	$ 2.75	$ 0
	Conversion	1,800	$ 2.80	$ 5,040	$ 5,040
B	From units started & completed
	Material	46,000	$ 2.75	$ 126,500
	Conversion	46,000	$ 2.80	$ 128,800	$ 255,300
C=A+B	Total				$ 260,340
D	Cost of Beginning WIP		$ 1,210
E=C+D	Total Cost of Units transferred		$ 261,550
	Cost of	Ending WIP	3,000.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
F	Material	3,000	$ 2.75	$ 8,250
G	Conversion	1,200	$ 2.80	$ 3,360
H = F + G	Total Cost of Ending WIP		$ 11,610
I = E + H	Total Cost accounted for	$ 273,160
J	Rounding Off Differences	$ 0
K = I + J	Total cost to be accounted for [equals to computed in STEP 3]	$ 273,160