Question

Trek Company has the following production data for April : units transferred out 40,730, and ending work in process 6,020 units that are 100% complete for materials and 40% complete for conversion costs.
If unit materials cost is $6 and unit conversion cost is $9,
Determine the costs to be assigned to the units transferred out and the units in ending work in process.

Answer 1

Answer:

                                                     Cost assigned

                                                               $

Transferred  out                             610,950

Work in Progress                            57,792

Explanation:

Cost assigned = cost per equivalent units × Number of equivalent units

Equivalent units = Degree of completion × units

The cost per unit for each expenditure type has been given so we need to determine the equivalent unit

The equivalent units for work in progress and units transferred would be worked out using the table below:

Equivalent units

                                           Material                   Conversion cost

Transferred out    100%× 40,730= 40,730            100%×40,730= 40,730

Work in Progress 100%× 6020 =6,020                 40%× 6020 =    2,408

Cost assigned:

                                  Material                   Conversion cost       Total

Transferred out         (40,730 ×$6)     +       ( 40,730  ×$9)=         610,950

Work in progress        (6,020× $6)    +        (2,408  ×$9) =             57,792

                                                      Cost assigned

                                                               $

Transferred  out                             610,950

Work in Progress                            57,792