In: Accounting
The Assembly Department uses a process cost accounting system.
The department adds materials and incurs conversion costs uniformly
throughout the process. During May, $200,000 of materials costs and
$95,000 in conversion costs were charged to the
department. The beginning Work in Process inventory was $63,000 on
May 1, comprised of $40,000 of materials costs and $23,000 of
conversion costs. The company employs the FIFO method of process
costing.
Other data for the month of May are as follows:
Beginning Work in Process inventory, 5/1 25,000 units (40%
complete)
Units completed and transferred out 50,000 units
Ending Work in Process inventory, 5/31 30,000 units (30%
complete)
Fill in the blanks below based on the information above:
A. How many physical units have to be accounted for in May? [80000] units
B. What are the equivalent units of production for materials for the month of May? [49000] EUP
C. What are the equivalent units of production for conversion costs for the month of May? [49000] EUP
D. What is the total cost assigned to one equivalent unit of production during the in May? $[6.02] rounded to the nearest $0.01.
E. Using the rounded result obtained in ‘D’ above, what is the
total cost assigned to the 50,000 units that were transferred out
of the Assembly Department in May? $[303800] rounded to the
nearest $1
F. What is the total cost of the May 31 inventory? $[54180] rounded to the nearest $1
UNITS TO ACCOUNT FOR: | |||||||||
Beginning Work in Process units | 25,000 | ||||||||
Add: Units Started in Process | 55,000 | ||||||||
Total Units to account for: | 80,000 | ||||||||
UNITS TO BE ACCOUNTED FOR: | |||||||||
Units completed from Beginning WIP | 25000 | ||||||||
Units started and completed | 25,000 | ||||||||
Ending Work in Process | 30,000 | ||||||||
Total Units to be accounted for: | 80,000 | ||||||||
Equivalent Units: | |||||||||
Material Cost | Conversion | ||||||||
% Completion | Units | % Completion | Units | ||||||
Units completed from Beg. WIP | 60% | 15,000 | 60% | 15,000 | |||||
Units started and completed | 100% | 25,000 | 100% | 25,000 | |||||
Ending Work in Process | 30% | 9,000 | 30% | 9,000 | |||||
Total Equivalent units | 49,000 | 49,000 | |||||||
COST PER EQUIVALENT UNIT: | |||||||||
Material | Conversion | ||||||||
Total cost added during the year | 200,000 | 95,000 | |||||||
Equivalent Units | 49,000 | 49,000 | |||||||
Cost per Equivalent unit | 4.08 | 1.94 | |||||||
TOTAL COST ACCOUNTED FOR: | |||||||||
Units Completed from Beginning WIP (25000 units) | |||||||||
Equivalent unit | Cost per EU | Total Cost | |||||||
Beginning Cost | 63000 | ||||||||
Material | 15,000 | 4.08 | 61200 | ||||||
Conversion Cost | 15,000 | 1.94 | 29100 | ||||||
Cost of units completed from Beg WIP | 153300 | ||||||||
Units started and Transferred out (25,000 units) | |||||||||
Equivalent unit | Cost per EU | Total Cost | |||||||
Material | 25,000 | 4.08 | 102000 | ||||||
Conversion Cost | 25,000 | 1.94 | 48500 | ||||||
Total Cost of Units completed and transferred out: | 150500 | ||||||||
Ending Work in process (30,000 units) | |||||||||
Equivalent unit | Cost per EU | Total Cost | |||||||
Material | 9,000 | 4.08 | 36720 | ||||||
Conversison Cost | 9,000 | 1.94 | 17460 | ||||||
Total cost of Ending Work in process: | 54,180 | ||||||||
Req 1: Total units to be accounted for: 80,000 units | |||||||||
Req b: Equivalent untis of Material: 49000 units | |||||||||
Req C: Equivalent units off converion: 49000 units | |||||||||
Req D: Cost per unit (4.08+1.94): $ 6.02 per unit | |||||||||
Req E: Total cost assigned to 50000 units: 153300+150300 = $ 303600 (difference due to rounding off) | |||||||||
Req E: Cost of Ending Inventory of Wip $ 54180 |