Question

Please hand work on paper.

Four Seasons Company makes snow blowers. Materials are added at the beginning of the process and conversion costs are uniformly incurred. At the beginning of September, the work-in-process is 40 percent complete and at the end of the month it is 60 percent complete for conversion costs. Other data for the month include: 1,000 units 2,500 units 2,500 units Beginning work-in-process inventory Units started Units completed and placed in finished goods Cost added during the period Cost of direct materials Conversion costs Beginning work-in-process costs: Materials Conversion $245,000 $202,400 $175,000 $76,000 Required: A) Determine the equivalent units of production for materials and conversion costs. B) Determine the cost per equivalent unit for materials and conversion costs. C) Prepare a production cost worksheet with supporting of process costing to show amount transferred out of WIP and the amount remaining in ending WIP. (Round to nearest dollar)

Answer 1

(A) Equivalent Units :-

	Material	Conversion
Units completed	2500	2500
Ending WIP	1000	(1000 * 60%) =600
Equivalent Units	3500	3100

(B) Cost per Equivalent Unit:-

	Material	Conversion
Beginning WIP cost	$175000	$76000
Cost added during month	$245000	$202400
Total Cost (A)	$420000	$278400
Equivalent Units (B)	3500	3100
Cost per Equivalent unit (A/B)	$120	$89.80645

(C) Production Report :-

Flow of production	Physical Units	Direct Materials	Conversion
Work in process, beginning	1000
Started during period	2500
To account for	3500
Units completed	2500	2500	2500
Work in process, ending	1000	1000	600
Accounted for	3500	3500	3100

Costs	Total	Direct Materials	Conversion
Work in process, beginning	$251000	$175000	$76000
Costs added during period	$447400	$245000	$202400
Total costs to account for	$698400	$420000	$278400
Divided by equivalent units		3500	3100
Equivalent unit costs	$209.81	$120	$89.80645
Assignment of costs:
Completed units	$524516	(2500 * $120) =$300000	(2500 * $89.80645) =$224516
Work in process, ending	$173884	(1000 * $120) =$120000	(600 * $89.80645) =$53884
Costs accounted for	$698400	$420000	$278400