Cost of Units Completed and in Process The charges to Work in Process—Assembly D
ID: 2550795 • 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 $1.50 for Direct Materials and $3.20 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 or no
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?
Explanation / Answer
UNITS TO ACCOUNT FOR: Beginning Work in Process units 7,000 Add: Units Started in Process 165,000 Total Units to account for: 172,000 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 7000 Units started and completed 154,000 Ending Work in Process 11,000 Total Units to be accounted for: 172,000 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units completed from Beg. WIP 0% 0 35% 2,450 Units started and completed 100% 154,000 100% 154,000 Ending Work in Process 100% 11,000 80% 8,800 Total Equivalent units 165,000 165,250 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 247,500 528,800 Equivalent Units 165,000 165,250 Cost per Equivalent unit 1.5 3.2 TOTAL COST ACCOUNTED FOR: Units Completed from Beginning WIP (7000 units) Equivalent unit Cost per EU Total Cost Beginning Cost 24150 Material 0 1.5 0 Conversion Cost 2,450 3.2 7840 Cost of units completed from Beg WIP 31990 Units started and Transferred out (154000 units) Equivalent unit Cost per EU Total Cost Material 154,000 1.5 231000 Conversion Cost 154,000 3.2 492800 Total Cost of Units completed and transferred out: 723800 Ending Work in process (11,000 units) Equivalent unit Cost per EU Total Cost Material 11,000 1.5 16500 Conversison Cost 8,800 3.2 28160 Total cost of Ending Work in process: 44,660 Req A; Cost of beginning Wip completed 31990 Cost of units transferred to FG (723800+31990) 755790 Cost of ending WIP 44660 Cost per unt of Completed Beginning WIP (31990/7000) 4.57 Req B: Yes, It has increased as witnessed that current cost per unit $4.70 and Beginning is low at $ 4.57 Req C: Begininng cost of WIP 24150 Less: material cost (7000 units @ 1.50) 10500 Conversion cost 13650 Divide: Equivalent units of Conversion cost (7000*65%) 4550 Conversion cost per unit 3 Yes, the conversion cost pere unit has been increased from $ 3.00 to $ 3.20