Question

The inventory at June 1 and costs charged to Work in Process—Department 60 during June are as follows: 3,800 units, 80% completed ($25,000 materials, $35,400 conversion) $ 60,400 Direct materials, 32,000 units 368,000 Direct labor 244,000 Factory overhead 188,000 Total cost to be accounted for $860,400 During June, 32,000 units were placed into production and 31,200 units were completed, including those in inventory on June 1. On June 30, the inventory of work in process consisted of 4,600 units which were 40% completed. Inventories are costed by the average cost method and all materials are added at the beginning of the process. Determine the following, presenting your computations: (20-176)
(a) Equivalent units of production for conversion cost
(b) Conversion cost per equivalent unit and material cost per equivalent unit.
(c) Total and unit cost of finished goods completed in the current period
(d) Total cost of work in process inventory at June 30

Answer 1

Answer:

EU for conversion: 33,040

cost per EU for materials  $10.98

for conversion $14.15

Transferred unit cost:

31,200 x (10.98 + 14.15) = 784,056

WIP inventory

4.600 x 10.98 =  50,508

1,840 x 14.15   =  26,036

Explanation:

Beginning    3,800

Started      32,000

Total            35800

Ending        (4,600)

transferred 31,200

Equivalent units Ending WIP:

materials 100% thus 4,600

conversion 40% which is 1,840

Total for materials: 35,800

for conversion: 33,040

cost per EU for materials

(25,000 + 368,000) / 35,800 =  $10.98

for conversion (35,400 + 244.000 +188,000) / 33,040 =  $14.15

ending 4600 4600 1840

Total units to be assigned costs 35,800 32000 56240