Question

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. EX.17-15.ALGO

Costs per Equivalent Unit and Production Costs

The following information concerns production in the Forging Department for November. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $56,050 of direct materials.

ACCOUNT Work in Process—Forging Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
Nov.	1	Bal., 5,900 units, 80% completed					65,962
	30	Direct materials, 54,000 units	502,200				568,162
	30	Direct labor	49,680				617,842
	30	Factory overhead	68,614		?		686,456
	30	Goods finished, ? units					?
	30	Bal., 4,700 units, 70% completed					?

Cost per equivalent units of $9.30 for Direct Materials and $2.20 for Conversion Costs.

Based on the above data, determine each of the following amounts.

If required, round your interim calculations to two decimal places. Round final answers (a-c) to the nearest dollar.

a. Cost of beginning work in process inventory completed in November.
$

b. Cost of units transferred to the next department during November.
$

c. Cost of ending work in process inventory on November 30.
$

d. Costs per equivalent unit of direct materials and conversion included in the November 1 beginning work in process. If required, round your answers to two decimal places.

Direct materials cost per equivalent unit	$
Conversion cost per equivalent unit	$

e. The November increase or decrease in costs per equivalent unit for direct materials and conversion from the previous month. If required, round your answers to two decimal places.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit		$
Change in conversion cost per equivalent unit		$

Answer 1

		Physical units	Materials	Conversion	Total
a)	Cost of beginning WIP	5900	$         56,050	$            9,912	$      65,962
	Equivalent units in beginning WIP		5900	4720
	Equivalent units for completion		0	1180
	Cost per equivalent unit in November		$             9.30	$              2.20
	Costs for completion		$                  -	$            2,596	$         2,596
	Cost of beginning WIP completed in November	5900	$         56,050	$          12,508	$      68,558
b)	Cost of units transferred to next department in November:
	Cost of beginning WIP completed in November	5900	$         56,050	$          12,508	$      68,558
	Cost of units introduced during November and completed:
	Equivalent units	49300	49300	49300
		[54000-4700]
	Cost per equivalent unit		$             9.30	$              2.20
	Cost units introduced during November and completed		$     4,58,490	$      1,08,460	$   5,66,950
	Cost of units transferred to next department in November	55200	$     5,14,540	$      1,20,968	$   6,35,508
c)	Cost of ending work in process:
	Units of ending work in process	4700	4700	3290
	Cost per equivalent unit		$             9.30	$              2.20
	Cost of ending work in process	4700	$         43,710	$            7,238	$      50,948
d)	Costs per equivalent unit of direct materials and conversion included in the November 1 beginning work in process:
	Cost		$         56,050	$            9,912
	Equivalent units		5900	4720
	Cost per equivalent unit in November		$             9.50	$              2.10
	Answer:
	Direct materials cost per equivalent unit	$            9.50
	Conversion cost per equivalent unit	$            2.10
e)		Increase or Decrease	Amount
	Change in direct materials cost per equivalent unit (9.50-9.30)	Decrease	$        0.20
	Change in conversion cost per equivalent unit (2.20+2.10)	Increase	$        0.10