Question

Toronto Manufacturing Ltd. has the following cost and production data for the month of November.

Beginning WIP 16,400 units

Started in production 103,400

Completed production 90,600

Ending WIP 29,200

The ending inventory was 40% complete for conversion costs. Materials are added at the beginning of the process.

Costs pertaining to the month of November are as follows:

Beginning inventory costs are: Materials $63,100 Direct labour 21,900 Factory overhead 15,900

Costs incurred during November include: Materials $559,860 Direct labour 195,000 Factory overhead 355,310

(a) Calculate the equivalent units of production for materials and for conversion costs.

(b) Calculate the unit costs for the month

(c) Determine the costs to be assigned to the units transferred out and in ending work in process

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				16,400
Add: Units Started in Process				103,400
Total Units to account for:				119,800
UNITS TO BE ACCOUNTED FOR:
Units started and completed				90,600
Ending Work in Process				29,200
Total Units to be accounted for:				119,800
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units started and completed			100%	90,600	100%	90,600
Ending Work in Process			100%	29,200	40%	11,680
Total Equivalent units				119,800		102,280
TOTAL COST TO ACCOUNT FOR:
			Material		Conversion
Beginning work in Process			63,100		37,800
Cost Added during May			559,860		550,310
Total Cost to account for:			622,960		588,110
Total Cost to account for:					1,211,070
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			622,960		588,110
Equivalent Units			119,800		102,280
Cost per Equivalent unit			5.2		5.75
TOTAL COST ACCOUNTED FOR:
Units Transferred out (90600 units)
			Equivalent unit	Cost per EU	Total Cost
Material			90,600	5.2	471120
Conversion Cost			90,600	5.75	520950
Total Cost of Units completed and transferred out:					992070
Ending Work in process (29200 units)
			Equivalent unit	Cost per EU	Total Cost
Material			29,200	5.2	151840
Conversison Cost			11,680	5.75	67160
Total cost of Ending Work in process:					219,000
Req a:
			Material	Conversion
Equivalent units			119800	102280
Req b:
			Material	Conversion
Cost per unit			5.2	5.75
Req c:
Cost of units transferred out:     $ 992070
Cost of ending WIP:    $ 219000