Question

eBook Calculator Unit Cost and Cost Assignment, Nonuniform Inputs Loran-Inc. had the following equivalent units schedule and cost for its fabrication department during September: Materials Conversion Units completed 180,000 180,000 61,000 Add: Units in ending WIP x Fraction complete 35,380 (61,000 x 58%) Equivalent units of output 241,000 215,380 Costs: Work in process, September 1: Materials $147,000 7,875 Conversion costs Total $154,875 Current costs: Materials $1,195,000 Conversion costs 446,425 Total $1,641,425 Required: 1. Calculate the unit cost for materials for conversion, and in total for the fabrication department for September. If required, round your answers to the neare Unit materials cost Unit conversion cost

Answer 1

Solution 1:

Loran Inc. Computation of Cost per equivalent unit -Fabrication department
Particulars	Material	Conversion	Total
Opening WIP	$147,000	$7,875	$154,875
Cost Added during Period	$1,195,000	$446,425	$1,641,425
Total cost to be accounted for	$1,342,000	$454,300	$1,796,300
Equivalent units of production	241000	215380
Cost per Equivalent unit	$5.57	$2.11

solution 2:

Loran Inc. Computation of Cost of ending WIP and units completed & transferred out - Fabrication Department
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	61000	35380
Cost per equivalent unit	$5.57	$2.11
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$339,770	$74,652	$414,422
Units completed and transferred	180000	180000
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$1,002,600	$379,800	$1,382,400