Question

T2-7 Assign costs to completed units and ending Work in Process Inventory (LO 4) Monk, Inc. reported the following results for the month of November.

	Units	Materials	Conversion
Work in Process
Beginning inventory	?	$ 5,900	$15,000
Added to production	?	47,300	65,000
Completed and transferred out	?	?	?
Ending inventory	40,000	60% complete	40% complete
Cost per equivalent unit		$0.40	$0.64

Required

a.How many units were completed and transferred out of Work in Process Inventory?

b.What cost should be assigned to the units transferred out of Work in Process Inventory?

c.What cost should be assigned to the ending Work in Process Inventory?

Answer 1

Total material cost = $5,900 + $47,300 = $53,200

Equivalent units for material = Total material cost / Cost per equivalent unit

= $53,200 / $0.40

= 133,000 units

Ending equivalent units for material = 40,000 X 60% = 24,000

a.

Units completed & transferred out = Equivalent units for material - Equivalent ending units for material

= 133,000 - 24,000

= 109,000 units

b.

Cost assigned to units transferred out

= (Material cost per equivalent unit + Conversion cost per equivalent unit) X Units completed & transferred out

= ($0.40 + 0.64) X 109,000 units

= $113,360

c.

Ending equivalent units for material = 24,000

Ending equivalent units for conversion = 40,000 X 40% = 16,000

Cost of ending work in process inventory:

= (24,000 X $0.40) + (16,000 X $0.64)

= $19,840