Question

Cost of Units Completed and in Process

The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.

Work in Process—Assembly Department

Bal., 8,000 units, 40% completed 29,120

Direct materials, 188,000 units @ $2. 376,000

Direct labor 586,100

Factory overhead 227,900

Bal. ? units, 35% completed ?

To Finished Goods,184,000 units?

Cost per equivalent units of $2.00 for Direct Materials and $4.40 for Conversion Costs.

a. Based on the above data, determine the different costs listed below.

If required, round your interim calculations to two decimal places.

1. Cost of beginning work in process inventory completed this period.$2. Cost of units transferred to finished goods during the period.$3. Cost of ending work in process inventory.$4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent.$

b. Did the production costs change from the preceding period?

c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				8,000
Add: Units Started in Process				188,000
Total Units to account for:				196,000
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				8000
Units started and completed				176,000
Ending Work in Process				12,000
Total Units to be accounted for:				196,000
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			0%	0	60%	4,800
Units started and completed			100%	176,000	100%	176,000
Ending Work in Process			100%	12,000	35%	4,200
Total Equivalent units				188,000		185,000
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			376,000		814,000
Equivalent Units			188,000		185,000
Cost per Equivalent unit			2		4.4
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (8000 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					29120
Material			0	2	0
Conversion Cost			4,800	4.4	21120
Cost of units completed from Beg WIP					50240
Units started and Transferred out (176000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			176,000	2	352000
Conversion Cost			176,000	4.4	774400
Total Cost of Units completed and transferred out:					1126400
Ending Work in process (12,000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			12,000	2	24000
Conversison Cost			4,200	4.4	18480
Total cost of Ending Work in process:					42,480
Req a:
Cost of Beginning WIP completed: $ 50240
Cost of Units transferred to FG (1126400+50240): $ 1176,640
Cost of Ending WIP:    $42480
Req B:
Cost fo Units of Beginnig WIP completed:				50240
Units				8000
Cost per unit				6.28
Current cost per unit				6.4
Cost increase from previous year.
Req C:
Beginning Cost of WIP				29120
Less: matrial (8000 units @ 2)				16000
Conversion cost in Beg. Inv.				13120
Number of Eq. units of conversion				3200
Conversion cost per unit				4.1
Conversion cost per unit has Increased frm $ 4.10 to $4.40