Cost of Units Completed and in Process The charges to Work in Process—Assembly D
ID: 2555718 • 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.
Work in Process—Assembly Department
Bal., 2,000 units, 55% completed 7,980 To Finished Goods, 46,000 units ?
Direct materials, 47,000 units @ $1.9 89,300
Direct labor 136,500
Factory overhead 53,125
Bal. ? units, 45% completed ?
Cost per equivalent units of $1.90 for Direct Materials and $4.10 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.
1. Cost of beginning work in process inventory completed this period. $
2. Cost of units transferred to finished goods during the period. $
3. Cost of ending work in process inventory. $
4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent. $
b. Did the production costs change from the preceding period?
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 2,000 Add: Units Started in Process 47,000 Total Units to account for: 49,000 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 2000 Units started and completed 44,000 Ending Work in Process 3,000 Total Units to be accounted for: 49,000 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units completed from Beg. WIP 0% 0 45% 900 Units started and completed 100% 44,000 100% 44,000 Ending Work in Process 100% 3,000 80% 1,350 Total Equivalent units 47,000 46,250 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 89,300 189,625 Equivalent Units 47,000 46,250 Cost per Equivalent unit 1.9 4.1 TOTAL COST ACCOUNTED FOR: Units Completed from Beginning WIP (2000 units) Equivalent unit Cost per EU Total Cost Beginning Cost 7980 Material 0 1.9 0 Conversion Cost 900 4.1 3690 Cost of units completed from Beg WIP 11670 Units started and Transferred out (44000 units) Equivalent unit Cost per EU Total Cost Material 44,000 1.9 83600 Conversion Cost 44,000 4.1 180400 Total Cost of Units completed and transferred out: 264000 Ending Work in process (3,000 units) Equivalent unit Cost per EU Total Cost Material 3,000 1.9 5700 Conversison Cost 1,350 4.1 5535 Total cost of Ending Work in process: 11,235 Req A: Cost of Beginning WIP complted this year: $ 11670 Req B: Cost of units transferred to FG: (11670+264000): $ 275670 Req C: Cost of Units of Ending WIP: $ 11235 Req D: a. cost per unit of Beginning WIP (11670/2000): $5.835 per unit b. Yes, production cost has been increassed. This is imperative from Cost per unit of beginnig Wip $5.835 and current units is $6.10 c. Total Beginnning Coost of WIP 7980 Less: material cost (2000 units @1.90) 3800 Conversion cost 4180 Number of conversion units (2000*55%) 1100 Conversion cost per unit 3.8 Conversion cost per unit is $3.80 in previous year as compared to $4.10 in current year INCREASE IN CONVERSION COST