Answer:
The answers are as follows:
a. 90, 000 units
b. Materials: 105,000; Conversion: 93,000
c. Materials: $1.4762; Conversion: $2.9785 (rounded to 4 decimal places)
d. $ 400,922 (rounded to whole dollar amount)
e. $31, 078 (rounded to whole dollar amount)
Explanation:
Work in process valuation entails calculating the value of goods which are started and completed during the period plus the value of goods which are not yet completed but have been started during the current period. In order to calculate the required, the following abbreviations will be employed:
<u>Op.Wip</u> is the value of the opening inventory
<u>Current </u>is the total cost of production in the current period
<u>Total C </u>is the total cost of production incurred during the current period including opening inventory
<u>Comp. U</u> is the quantity of completed units in the current period
<u>WIP eq.U </u>is the equivalent units of production for the current period. Equivalent units are the number of units that are computed for partially completed units of production.
<u>Total eq.U</u> is the total quantity of units produced including equivalent units (completed units plus equivalent units)
<u>CPU</u> is the cost per unit of production for materials as well as conversion costs
<u>Mat</u> represents materials and <u>CC</u> represents conversion costs
<u>Part 1</u>
<u> $ </u> <u> $ </u> <u> $ </u> <u> $ </u> <u> $ </u> <u> $ </u>
Op. Wip Current Total C Comp. U WIP eq.U Total eq.U
Mat 35,000 120,000 155,000 90,000 15,000 105,000
CC <u>43,000</u> 234,000 <u>277,000</u> 90,000 3,000 93,000
<u>78,000</u> <u>432000</u>
Equivalent units: Materials (15,[email protected]% completion = 15,000 units); Conversion (15,[email protected]% completion = 3,000 units)
Cost Per Unit (CPU):
Materials cost: $1.476* ($155,000/105,000 units)
Conversion cost: $2.978** ($277,000/93,000 units)
Total CPU: $4.454** ($1.476 + $2.978)
*1.476190476
**2.978494624
***4.4546851
<u>Part 2:</u>
Work in Process: <u>$</u>
Materials: (15000 units * 1.476190476) 22,142.85714
Conversion Costs: (3000 units * 2.978494624) 8935.483871
Completed units: (90,000 units * 4.4546851) <u> 400,921.659</u>
<u> </u><u> 432, 000 </u>