Cost of Units Completed and in Process The charges to Work in Process—Assembly D
ID: 2341255 • Letter: C
Question
Cost of Units Completed and in Process
The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.
Cost per equivalent units of $1.70 for Direct Materials and $4.40 for Conversion Costs.
a. Based on the above data, determine the different costs listed below.
If required, round your interim calculations to two decimal places.
b. Did the production costs change from the preceding period?
Yes
c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?
Increase
Explanation / Answer
Solution a:
Refer above production cost report:
Cost of beginning work in process inventory completed this period = $53,280
Cost of units transferred to finished goods during the period = $1,261,080
Cost of ending work in process inventory = $70,000
Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent. = $53,280 /9000 = $5.92 per unit
Solution b:
Yes production cost change from the preceding period.
Solution c:
If direct material cost per unit did not change from the preceding period then direct material cost in beginning WIP = 9000 * $1.70 = $15,300
Conversion cost in beginning WIP = $37,440 - $15,300 = $22,140
Total equivalent unit of conversion in begining WIP = 9000*60% = 5400
Cost per equivalent unit of conversion in beginning WIP = $22,140 / 5400 = $4.10 per unit
Therefore conversion cost per equivalent unit increases for the current period.
Material - 0%
Conversion - 40% 9000 0 3600 Started and completed currently 198000 198000 198000 Units in ending WIP
Material - 100%
Conversion - 75% 14000 14000 10500 Total units accounted for 221000 212000 212100