Question

Cost of Units Completed and in Process The charges to Work in Process-Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production. Work in Process-Assembly Department Bal., 8,000 units, 30% completed 22,080 To Finished Goods, 184,000 units Direct materials, 188,000 units @ 394,800 $2.1 Direct labor 327,300 Factory overhead 127,260 Bal. ? units, 65% completed Cost per equivalent units of $2.10 for Direct Materials and $2.40 for Conversion Costs. 2 a. Based on the above data, determine the different costs listed below. If required, round your interim calculations to two decimal places. 1. Cost of beginning work in process inventory completed this period. 2. Cost of units transferred to finished goods during the period. 3. Cost of ending work in process inventory. 4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent. b. Did the production costs change from the preceding period? c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the Increase

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer Parta) 1) Cost of beginning work in process inventory completed this period = equivalent units of conversion cost completed during the period for beginning inventory * conversion cost per unit = (8000*70%) * 2.4 = $ 13440 2) Cost of units transferred to finished goods during the period = no. of finished goods units * total cost per equivalent unit = 184000 * (2.1+2.4) = $ 828000 3) Cost of ending work in process = no. of units in ending work in process * material cost per unit +(equivalent ending units * conversion cost per unit) = ((8000+188000-184000)*2.1) + ((12000*65%)*2.4) = 25200 + 18720 = $ 43920 4)Cost per unit of beginning work in process inventory =( beginning inventory cost + cost incurred during the period)/8000 = (22080+13440)/8000 = $ 4.44 - The correct answer is Yes, as cost per unit has changed C) Conversion cost increased, as cost per unit has increased