Question

McElroy, Inc., produces a single model of a popular cell phone in large quantities. A single cell phone moves through two departments, assembly and testing. The manufacturing costs in the assembly department during March follow:

Direct materials	$	224,400
Conversion costs		207,700
	$	432,100

The assembly department has no beginning Work-in-Process Inventory. During the month, it started 33,000 cell phones, but only 29,000 were fully completed and transferred to the testing department. All parts had been made and placed in the remaining 4,000 cell phones, but only 50% of the conversion had been completed. The company uses the weighted-average method of process costing to accumulate product costs.

Required:

1. Compute the equivalent units and costs per equivalent unit for March in the assembly department.

2. Compute the cost of units completed and transferred to the testing department.

3. Compute the cost of the ending Work-in-Process.

Required 1

Compute the equivalent units and costs per equivalent unit for March in the assembly department. (Round "Costs per equivalent unit" to 2 decimal places.)

	Direct Materials Conversion Equivalent units Costs per equivalent unit

• Required 2

Compute the cost of units completed and transferred to the testing department. (Round intermediate calculations to 2 decimal places.)

	Cost of units completed and transferred out

• Required 3

Compute the cost of the ending Work-in-Process. (Round intermediate calculations to 2 decimal places.)

	Cost of the ending work-in-process

Answer 1

Production report using weight Average Method 1. Equivalent units for Material and Conversion cost Equivalent Unit Material Conversion Physical units Units to be accounted for:- Units Completed & transferred out Ending work in Process Total Units 29000 4000 33000 29000 4000 33000 29000 2000 31000 Ending WIP = Units in ending WIP * Percentage complete 4000 x 100% 4000 x 50% Cost Per Equivalent Unit Material Conversion Total cost Cost To be accounted For:- Beginning work in process Cost added during month Total Cost (A) $ 224,400 $ 224,400 $ 207,700 207,700 432,100 (Given) 432,100 (B) Equivalent Units Cost per equivalent unit 33000 6.80 31000 6.70 $ (A)/(B) $ 13.50 Beginning wip is zero as there is no beginning inventory. 2. Cost of goods Transferred out Units Completed & Transferred out:- Material Conversion Total Cost of units completed & Transferred out $ $ 197,200 194,300 (29000 units x $6.80) (29000 units x $6.70 ) $ 391,500 3. cost of Ending work in Process Ending work in process :- Material Conversion Total Cost of Ending Work in Process 27,200 13,400 (4000 units x $ 6.80) (4000 units x $ 6.70) $ $ 40,600