Answer:
a. Reconciliation of the number of physical units worked on during the period.
As at Beginning 36,000
Units started in current period <u>74,000
</u>
Units to be accounted for 110,000
Transferred out 21,000 Balancing figure
(110,000 - 89,000)
As at end <u>89,000</u>
Units accounted for <u>110,000</u>
b. Calculation of equivalent units.
Direct Materials Conversion Costs
Transferred out (A) 21,000 21,000
Units as at end (B) 89,000 89,000
Percentage of completion (C)
100% 52%
Equivalent units as at 31 Dec 89,000 46,280
(D = B * C)
Total equivalent units (A+D) 110,000 67,280
c. Calculation the cost per equivalent unit.
Direct Materials Conversion Total
As at beginning 48000 105000 153000
Added during the period 91000 161000 252000
Costs to be accounted for 139000 266000 405000
Total equivalent units 110,000 67,280
Cost per equivalent unit 1.26364 3.95363 5.21726
Note:
Cost per equivalent unit = Costs to be accounted for / Total equivalent units
d. Reconciliation the total cost of work in process.
Direct Materials Conversion Total
Units as at end (A) 89,000 89,000 89,000
Cost per equivalent unit (B) 1.26364 3.95363 5.21726
Percentage of completion (C) 100% 52%
Total cost (A*B*C) 112,464 182,974 295,437
Cost of closing WIP = Costs to be Accounted for - Costs Transferred Out
= 405000 - (21000 units * 5.21726)
= 405,000 - 109,562.46
= 295437.54
= $295,4378
