Toronto Manufacturing Ltd. has the following cost and production data for the mo
ID: 2339138 • Letter: T
Question
Toronto Manufacturing Ltd. has the following cost and production data for the month of November.
Beginning WIP 16,400 units
Started in production 103,400
Completed production 90,600
Ending WIP 29,200
The ending inventory was 40% complete for conversion costs. Materials are added at the beginning of the process.
Costs pertaining to the month of November are as follows:
Beginning inventory costs are: Materials $63,100 Direct labour 21,900 Factory overhead 15,900
Costs incurred during November include: Materials $559,860 Direct labour 195,000 Factory overhead 355,310
(a) Calculate the equivalent units of production for materials and for conversion costs.
(b) Calculate the unit costs for the month
(c) Determine the costs to be assigned to the units transferred out and in ending work in process
Explanation / Answer
UNITS TO ACCOUNT FOR: Beginning Work in Process units 16,400 Add: Units Started in Process 103,400 Total Units to account for: 119,800 UNITS TO BE ACCOUNTED FOR: Units started and completed 90,600 Ending Work in Process 29,200 Total Units to be accounted for: 119,800 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units started and completed 100% 90,600 100% 90,600 Ending Work in Process 100% 29,200 40% 11,680 Total Equivalent units 119,800 102,280 TOTAL COST TO ACCOUNT FOR: Material Conversion Beginning work in Process 63,100 37,800 Cost Added during May 559,860 550,310 Total Cost to account for: 622,960 588,110 Total Cost to account for: 1,211,070 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 622,960 588,110 Equivalent Units 119,800 102,280 Cost per Equivalent unit 5.2 5.75 TOTAL COST ACCOUNTED FOR: Units Transferred out (90600 units) Equivalent unit Cost per EU Total Cost Material 90,600 5.2 471120 Conversion Cost 90,600 5.75 520950 Total Cost of Units completed and transferred out: 992070 Ending Work in process (29200 units) Equivalent unit Cost per EU Total Cost Material 29,200 5.2 151840 Conversison Cost 11,680 5.75 67160 Total cost of Ending Work in process: 219,000 Req a: Material Conversion Equivalent units 119800 102280 Req b: Material Conversion Cost per unit 5.2 5.75 Req c: Cost of units transferred out: $ 992070 Cost of ending WIP: $ 219000