Question

Required information [The following information applies to the questions displayed below.] Tamar Co. manufactures a single product in two departments. All direct materials are added at the beginning of the Forming process. Conversion costs are added evenly throughout the process. During May, the Forming department started 20,800 units and transferred 22,500 units of product to the Assembly department. Its 5,200 units of beginning work in process consisted of $17,100 of direct materials and $320,940 of conversion costs. It has 3,500 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $424,900 of direct materials costs and $2,183,760 of conversion costs were charged to the Forming department. 2. Prepare the journal entry dated May 31 to transfer the cost of units to Assembly. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)

Answer 1

Solution 2:

Tamar Company
Forming Process
Computation of Equivalent unit of Production
Particulars	Physical Units	Material	Conversion
Units to account for:
Beginning WIP	5200
Started into Production	20800
Total units to account for	26000
Units accounted for:
Unit completed & Transferred out	22500	22500	22500
Units in ending inventory:	3500
Material (100%)		3500
Conversion (80%)			2800
Equivalent units of production	26000	26000	25300

Computation of Cost per equivalent unit - Forming Process
Particulars	Material	Conversion	Total
Opening WIP	$17,100	$320,940	$338,040
Cost Added during Period	$424,900	$2,183,760	$2,608,660
Total cost to be accounted for	$442,000	$2,504,700	$2,946,700
Equivalent units of production	26000	25300
Cost per Equivalent unit	$17.00	$99.00

Computation of Cost of ending WIP and units completed & transferred out - Forming Process
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	3500	2800
Cost per equivalent unit	$17.00	$99.00
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$59,500	$277,200	$336,700
Units completed and transferred	22500	22500
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$382,500	$2,227,500	$2,610,000

Journal Entries
Date	Particulars	Debit	Credit
31-May	Work In Process - Assembly Dr	$2,610,000.00
	To Work In Process - Forming		$2,610,000.00
	(Being units completed transferred to assembly)