Question

Thakin Industries Inc. manufactures dorm furniture in separate processes. In each process, materials are entered at the beginning, and conversion costs are incurred uniformly. Production and cost data for the first process in making a product are as follows.

		Cutting Department
Production Data—July		T12-Tables
Work in process units, July 1		0
Units started into production		20,800
Work in process units, July 31		3,120
Work in process percent complete		60
Cost Data—July
Work in process, July 1		$0
Materials		395,200
Labor		243,776
Overhead		108,160
Total		$ 747,136

(a1)

Compute the physical units of production.

		T12 Tables
Units to be accounted for

b. For each plant compute equivalent units of production for materials and for conversion costs.

c). For each plant determine the unit costs of production. (Round unit costs to 2 decimal places, e.g. 5.25.)
d). For each plant show the assignment of costs to units transferred out and in process.

Answer 1

• [a1]

Units to account for:
Beginning WIP	-
Units started this period	20,800
Total Units to account for	20,800 Answer
Total Units accounted for:
Completed & Transferred out	17,680
Ending WIP	3,120
Total Units accounted for	20,800 Answer

• [b]
  

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	17,680	100%	17,680	100%	17,680
Units of ENDING WIP	3,120	100%	3,120	60%	1,872
Equivalent Units of Production			20,800 Answer		19,552 Answer

• [c]

COST per EUP			Material		Conversion
Cost of Beginning WIP			$                          -		$                                                 -
Cost incurred during the period			$        395,200.00		$                                351,936.00
Total Costs		Costs	$        395,200.00	Costs	$                                351,936.00
Equivalent units of production		EUP	20,800	EUP	19,552
Cost per EUP Answer			$            19.00		$                                   18.00

Unit Cost = 19 + 18 = $ 37.00

• [d]

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	17,680	$                    19.00	$        335,920.00
- Conversion	17,680	$                    18.00	$        318,240.00
Total Cost transferred Out				$            654,160.00 Answer
Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	3,120	$                    19.00	$          59,280.00
- Conversion	1,872	$                    18.00	$          33,696.00
Total cost of ending WIP				$              92,976.00 Answer