Question

Cempaka Bhd. 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 March. Percent Completed Materials Conversion 60% 50% Work in process, beginning Started into production Completed and transferred out Work in process, ending Work in process, beginning Cost added during the year Unitsn 240,000 106,000 1,160,000 140,000 70% 40% RM87,300 RM66,800 RM900,300 RM445,200 Required: Assume that the company uses the weighted-average method. a) Determine the equivalent units for March for the mixing department. (CLO2:PLO1:C3) (3 marks)

Answer 1

Answer

% Complete Materials Conversion 60% 50% WIP, beginning Started into production Completed and transferred out WIP, ending Units 2,40,000 1,06,000 11,60,000 1,40,000 70% 40% WIP, beginning Cost added during March Materials $87,300 59,00,300 Conversion $66,800 54,45,200 Total $1,54,100 $13.45,500 Answer first 4 sub-parts only as per chegs guidelines Assume that the company uses the weighted average method. 1. Determine the equivalent units for March for the first process. Equivalent units of production Materials 12,58,000 Conversion 12, 16,000 Materials 11,60,000 Conversion 11,60,000 Transferred to next department Ending WIP Materials: 140,000 units x 70% complete Conversion: 140,000 units x 40% complete Equivalent units of production 98000 56000 12.16 000 12.58,000 2. Compute the costs per equivalent unit for March for the first process. (Round your answer to 3 decimal places.) Cost per equivalent unit Materials $0.785 Conversion $0.421 Cost of beginning WIP Cost added during the period Total cost (a) Equivalent units of production (b) Cost per equivalent unit, (a)/(b) Materials $87,300 $9,00,300 $9,87,600 12,58,000 $0.785 Conversion $66,800 $4,45,200 $5,12,000 12,16,000 $0.421 3. Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process in March. (Round intermediate calculations to 3 decimal places.) Cost of ending WIP inventory Cost of units completed and transferred out Materials $75.935 $9,10,665 Conversion $23,579 $488,421 Total $1,00,514 $13,99,086 Ending WIP inventory Equivalent units of production (Materials: 140,000 x 70% complete; Conversion: 140,000 x 40% complete) Cost per equivalent unit Cost of ending WIP inventory Units completed and transferred out: Units transferred to the next department Cost per equivalent unit Cost of units completed and transferred out 98000 $0.785 $76,935 56000 $0.421 $23,579 $1,00,514 11,60,000 $0.785 $9,10,665 11,60,000 $0.421 S488,421 L $13,99,086 4. Prepare a report that reconciles the total costs assigned to the ending WIP inventory and the units transferred out with the costs in beginning inventory and costs added during the period. (Round intermediate calculations to 3 decimal places.) $1,54,100 $13,45.500 $14.99.600 Cost Reconciliation Costs to be accounted for: Cost of beginning WIP Costs added to production during the period Total cost to be accounted for Costs accounted for as follows: Transferred to next department: WIP, March 31 Materials Conversion $13,98,960 (1160000 x 1.206) $76935 $23,579 $100,514 $14,99,474 $126 Rounding off difference Total cost accounted for Dill