Question

The Blending Department of Luongo Company has the following cost and production data for the month of April.

Costs:
Work in process, April 1
Direct materials: 100% complete		$ 122,000
Conversion costs: 20% complete		85,400
Cost of work in process, April 1		$ 207,400
Costs incurred during production in April
Direct materials		$ 976,000
Conversion costs		445,300
Costs incurred in April		$ 1,421,300

Units transferred out totaled  20,740. Ending work in process was  1,220 units that are 100% complete as to materials and 40% complete as to conversion costs.

(a)

Compute the equivalent units of production for (1) materials and (2) conversion costs for the month of April.

		Materials		Conversion Costs
The equivalent units of production

(b) Compute the unit costs for the month. (Round unit costs to 0 decimal places, e.g. $25.)

Unit cost for the month

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

Transferred out$
Work in process
Materials$
Conversion costs
Total costs$

Answer 1

Requirement a

	Material	Conversion
Equivalent Units of Production	21,960	21,228

Requirement b

	Material	Conversion
Cost per equivalent Unit	$ 50.00	$ 25.00

Requirement C

	Material	Conversion	Total
Units Completed	$       10,37,000	$         5,18,500	$        15,55,500
Ending Inventory	$             61,000	$             12,200	$              73,200

Working

Statement of Equivalent Units
				Material		Conversion Cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	20,740			100%	20,740	100%	20,740
Closing WIP	1,220			100%	1,220	40%	488
Total	21,960			Total	21,960	Total	21,228

Cost per Equivalent Units
COST		Material	Conversion Cost	TOTAL
Beginning WIP Inventory Cost		$         1,22,000	$              85,400	$        2,07,400
Cost incurred during period		$         9,76,000	$          4,45,300	$      14,21,300
Total Cost to be accounted for		$       10,98,000	$          5,30,700	$      16,28,700
Total Equivalent Units		21,960	21,228
Cost per Equivalent Units		$               50.00	$                25.00

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$               50.00	1,220	$              61,000	$            20,740	$       10,37,000
Conversion Cost	$               25.00	488	$              12,200	$            20,740	$          5,18,500
TOTAL	$       16,28,700	TOTAL	$              73,200	TOTAL	$       15,55,500