Part 3- Problem: (15 points) The ledger of Hsu Company has the following work in
ID: 2600394 • Letter: P
Question
Part 3- Problem: (15 points) The ledger of Hsu Company has the following work in process account. WORK IN PROCESS-PAINTING 5/31 Transferred out 5/1 Balance 5/31 Labor 5/31 Balance 8,741 5/31 Materials 6,460 2,400 5/31 Overhead1626 Production records show that there were 500 units in the beginning inventory, 30% complete, 1,350 units started, and 1,350 units transferred out. The beginning work in process had materials cost of $4,862 and conversion costs of $3,879. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process Instructions (a) How many units are in process at May 31? (b) What is the unit materials cost for May? (c) What is the unit conversion cost for May? (d) What is the total cost of units transferred out in May? (e) What is the cost of the May 31 inventory?Explanation / Answer
Answer:
(a) How many units are in process at May 31?
Work in process May .1
500
Started into production
1,350
Total units to be accounted for
1,850
Less: Transferred out
(1,350)
Work in process, May 31
500
(b) What is the unit materials cost for May?
Units
Units transferred out
1,350
Work in process, May 31
500
1,850
Cost ($)
Work in process, May 1
4,862
Costs added:
Material
6,460
Total Cost
11,322
Unit Material Cost
$ 6.12
(c) What is the unit conversion cost for May?
Units
Units transferred out
1,350
Work in process, May 31
200
(500 X 40%)
Total
1,550
Work in process, May 1
Cost $ 3,879
Costs added:
Labor
2,400
Overhead
1,626
Total Cost
7,905
Unit Conversion Cost
$5.10
(d) What is the total cost of units transferred out in May?
Material ( 1,350 X 6.12)
$ 8,262
Conversion Cost (1,350 X 5.10)
$6,885
Total Cost of transferred out
$15,147
(e) What is the cost of the May 31 inventory?
Material ( 500 X 6.12)
$3,060
Conversion Cost (200X 5.10)
$1,020
Total Cost of May 31 inventory
$4,080
Answer:
(a) How many units are in process at May 31?
Work in process May .1
500
Started into production
1,350
Total units to be accounted for
1,850
Less: Transferred out
(1,350)
Work in process, May 31
500
(b) What is the unit materials cost for May?
Units
Units transferred out
1,350
Work in process, May 31
500
Total1,850
Cost ($)
Work in process, May 1
4,862
Costs added:
Material
6,460
Total Cost
11,322
Unit Material Cost
$ 6.12
($11322/1850)(c) What is the unit conversion cost for May?
Units
Units transferred out
1,350
Work in process, May 31
200
(500 X 40%)
Total
1,550
Work in process, May 1
Cost $ 3,879
Costs added:
Labor
2,400
Overhead
1,626
Total Cost
7,905
Unit Conversion Cost
$5.10
($ 7905/1550)(d) What is the total cost of units transferred out in May?
Material ( 1,350 X 6.12)
$ 8,262
Conversion Cost (1,350 X 5.10)
$6,885
Total Cost of transferred out
$15,147
(e) What is the cost of the May 31 inventory?
Material ( 500 X 6.12)
$3,060
Conversion Cost (200X 5.10)
$1,020
Total Cost of May 31 inventory
$4,080