Question

The Assembly Department of BWL Surge Protectors began September with no work in process inventory. During the​ month, production that cost $35,282

​(direct materials,$8,242​, and conversion​ costs, $27,040)​ was started on 23,000 units. BWL completed and transferred to the Testing Department a total of 12,000 units. The ending work in process inventory was 35% complete as to direct materials and 80% complete as to conversion work.

Requirements

1. Compute the equivalent units for direct materials and conversion costs.

2. Compute the cost per equivalent unit.

3. Assign the costs to units completed and transferred out and ending work in process inventory.

4. Record the journal entry for the costs transferred out of the Assembly Department to the Testing Department.

5. Post all of the transactions in the​ "Work in Process

Inventorylong dash—​Assembly"

​T-account. What is the ending​ balance?

Answer 1

1.

Calculation of equivalent production:
Particulars	Units	Direct Materials	Conversion Costs
Opening work in progress	0	0	0
Completed and tranferred units	12000	12000	12000
Closing stock (Material 35%, Conversion cost 80%)	11000	3850	8800
Total equialent units	23000	15850	20800

2.

Cost per equivalent unit:
Particulars	Direct Materials	Conversion Costs
Costs	$8,242	$27,040
Equivalent units	15850	20800
Cost per unit	$0.5200	$1.3000

3.

Assignment of cost:
Particulars	Units	Direct Materials	Conversion Costs
a. Cost per unit		$0.52	$1.30
b. Completed and transferred	12000	12000	12000
c. Cost of completed units=		$6,240	$15,600
d. Closing stock (Material 35%, Conversion cost 80%)	11000	3850	8800
e. Cost of closing stock= a*d		$2,002	$11,440

4. Assembly Direct Materials cost a/c Dr. 6240

Assembly Conversion cost a/c Dr 15600

To Testing department a/c 21840

(Being costs transferred to testing department)

5.Direct material a/c 6240

Conversion cost a/c 15600

To Work in process a/c 21840

(completed costs entered)

Closing stock a/c- materials Dr 2002

Closing stock a/c- materials Dr 11440

To Work in process a/c 13442

(being closing stock transferred)