Question

Kramer Corp. began the current period with 4,000 units in process that were 100% complete as to materials and 60% complete as to conversion. Costs of $7,500 in direct materials and $4,700 in conversion costs were incurred in manufacturing those units in the previous period. Kramer ended the current period with 20,000 units completed and 5,00 units still in process. Work in process was 100% complete as to materials and 70% complete as to conversion costs. Kramer incurred $67,500 in direct materials costs, $7,000 in direct labor costs, and $40,00 in manufacturing overhead costs during the period.

1.) Reconcile the number physical units worked on in the current month.

2.) Calculate the number of equivalent units for conversion costs.

3.) Calculate the cost per equivalent unit for conversion costs. (Round to 2 decimals)

​​​​​​​3.) Reconcile the total cost of completed and ending work in process inventory.

If you can please provided the formula so I can practice on similar questions and how you figured it out. Thanks!

Answer 1

	FIFO METHOD HAS BEEN USED FOR THE SOLUTION:
1)	UNITS TO ACCOUNT FOR:	Physical Units
	Beginning units in process	4000
	Units Started during the period	16500
	Total Units	20500
2)	UNITS ACCOUNTED FOR:		Equivalent Units
		Physical Units	Direct Materials	Conversion
	Beginning units in process completed	4000	0	1600
	Number of units introduced during the period and completed	16000	16000	16000
	Total units completed and transferred out	20000	16000	17600
	Ending inventory	500	500	350
	Total units to account for	20500	16500	17950
	COSTS TO ACCOUNT FOR:		Direct Materials	Conversion	Total Cost
	Costs in beginning WIP		7500	4700	12200
	Costs added in June		67500	11000	78500
			75000	15700	90700
3)	Cost per equivalent unit for the period		$           4.09	$           0.61
4)	COSTS ACCOUNTED FOR:		Direct Materials	Conversion Cost	Total Cost
	Cost of beginning work in process		$         7,500	$        4,700	$      12,200
	Cost to complete beginning work in process		$                -	$            976	$            976
	Total cost of beginning work in process completed		$         7,500	$        5,676	$      13,176
	Cost of units introduced and completed		$       65,440	$        9,760	$      75,200
	Total cost of units completed and transferred		72940	15436	88376
	Cost of ending work in process		2045	214	2259
	Total		74985	15650	90635