Answer:
a) EU for materials = 170,000
EU for conversion = 165,000
b) Materials = $0.82 per EU
Conversion = $1.48 per EU
c) Ending WIP = $28,240
Units transferred out = $368,760
d) cost reconciliation report:
Costs to be accounted for:
- Beginning WIP $13,400
- Cost added $383,600
- Total costs to be accounted for $397,000
Cost accounted for as follows:
- Unit transferred out $368,760
- Ending WIP $28,240
- Total cost accounted for $397,000
Explanation:
beginning WIP 10,000
materials 100% complete (0% added during the period)
conversion 30% complete (70% added during the period) ⇒ 7,000 EU
units started 170,000
ending WIP 20,000
materials 100% complete ⇒ 20,000 EU
conversion 40% complete ⇒ 8,000 EU
units completed = 160,000
units started and completed = 150,000
beginning WIP costs:
Materials cost $8,500
Conversion cost $4,900
costs added during the period:
Materials cost $139,400
Conversion cost $244,200
Equivalent units for July:
EU for materials = 170,000
EU for conversion = 7,000 + 150,000 + 8,000 = 165,000
Costs per EU:
Materials = $139,400 / 170,000 = $0.82 per EU
Conversion = $244,200 / 165,000 = $1.48 per EU
Total costs:
Ending WIP = (20,000 x $0.82) + (8,000 x $1.48) = $28,240
Units transferred out = ($383,600 - $28,240) + $8,500 + $4,900 = $368,760
Costs to be accounted for:
- Beginning WIP $13,400
- Cost added $383,600
- Total costs to be accounted for $397,000
Cost accounted for as follows:
- Unit transferred out $368,760
- Ending WIP $28,240
- Total cost accounted for $397,000
