Question

Question 2 Honeybutter, Inc., manufactures a product that goes through two departments prior to completion—the Mixing Department followed by the Packaging Department. The following information is available about work in the first department, the Mixing Department, during June. Work in process inventory, Junel Work in process inventory, June 30 Units Materials Conversion 70,000 70% 40% 80,000 75% 25% Work in process inventory, June 1 Cost added during June Materials $ 36,650 391,750 Conversion $ 13,500 287,300 During June, 450,000 units were completed and transferred to the Packaging Department. Required: a. Determine the equivalent units for June for the Mixing Department. b. Compute the costs per equivalent unit for June for the Mixing Department. c. Determine the total cost of ending work in process inventory and the total cost of units transferred to the Packaging Department. d. Prepare a cost reconciliation report for the Mixing Department for June.

Answer 1

Solution

	Material	Conversion
Equivalent Units of Production	510,000	470,000

.

	Material	Conversion
Cost per equivalent Unit	$                    0.84	$                   0.64

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	Material	Conversion	Total
Ending Inventory	$ 50,400	$ 12,800	$ 63,200
Units Completed and transferred	$ 378,000	$ 288,000	$ 666,000

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Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 50,150
Cost incurred during period	$ 679,050
Total cost to be accounted for	$ 729,200
Costs accounted for as follows:
Cost of Units Transferred Out	$ 666,000
Cost of Ending Wip	$ 63,200
Total cost accounted for	$ 729,200

Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	450,000			100%	450,000	100%	450,000
Ending WIP	80,000			75%	60,000	25%	20,000
Total	530,000			Total	510,000	Total	470,000

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Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 36,650	$ 13,500	$ 50,150
Cost incurred during period		$ 391,750	$ 287,300	$ 679,050
Total Cost to be accounted for		$ 428,400	$ 300,800	$ 729,200
Total Equivalent Units		510,000	470,000
Cost per Equivalent Units		$                 0.840	$                   0.640	$                1.48

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Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 0.84	60,000	$          50,400.00	450,000	$        378,000.00
Conversion cost	$ 0.64	20,000	$          12,800.00	450,000	$        288,000.00
TOTAL	$ 729,200	TOTAL	$ 63,200	TOTAL	$ 666,000