Question

P21-4B Ignatenko Company has several processing departments. Costs charged to the Assembly Department for October 2012 totaled $1,249,500 as follows. Work in process, October 1 Materials $29,000 Conversion costs 16,500 $ 45,500 Materials added 1,006,000 Labor 90,000 Overhead 108,000 Production records show that 25,000 units were in beginning work in process 40% complete as to conversion cost, 425,000 units were started into production, and 35,000 units were in ending work in process 40% complete as to conversion costs. Materials are entered at the beginning of each process. Instructions (a) Determine the equivalent units of production and the unit production costs for the Assembly Department (b) Determine the assignment of costs to goods transferred out and in process. (c) Prepare a production cost report for the Assembly Department

Answer 1

IGNATENKO COMPANY
The process account for Assembly department would be as under
	Units		Units
Units in Beg.WIP	25,000	Units Completed and Transferred
Units Started this period	425,000	Units from Beg.WIP	25,000
		Units Started and Completed	390,000
		Total units completed and transferred	415,000
		Units in End. WIP	35,000
	450,000		450,000
(a) Computation of equivalent units of production
	% of work done	Units	Equivalent Units
Work done on units in Op. WIP
Materials	0%	25,000	-
Conversion costs	60%	25,000	15,000
Units introduced and completed
Materials	100%	390,000	390,000
Conversion costs	100%	390,000	390,000
Work done on units in Cl. WIP
Materials	100%	35,000	35,000
Conversion costs	40%	35,000	14,000
Equivalent units of production
Materials	425,000
Conversion costs	419,000
Computation of equivalent cost per unit
	Total Costs	Equivalent Units	Cost per Unit
Materials	1,006,000	425,000	2.37
Conversion costs	198,000	419,000	0.47
(b) Assignment of costs to goods teansferred out and in process
	Equivalent Units	Cost per Unit	Assigned Costs	Opening Costs	Total Costs
Opening WIP
Materials	-	$2.37	$0	$29,000	$29,000
Conversion costs	15,000	$0.47	$7,088	$16,500	$23,588
Total costs of Op.WIP			$7,088	$45,500	$52,588
Units completed
Materials	390,000	$2.37	$923,153	$0	$923,153
Conversion costs	390,000	$0.47	$184,296	$0	$184,296
Total cost of units introduced and completed			$1,107,449	$0	$1,107,449
Total costs of units completed and transferred
Closing WIP
Materials	35,000	$2.37	$82,847	$0	$82,847
Conversion costs	14,000	$0.47	$6,616	$0	$6,616
Total costs of Cl.WIP			$89,463	$0	$89,463
(c.) Production Cost Report
	Units	Value		Units	Value
Opening Work-in process	25,000	$45,500	Units Completed and Transferred
Units introduced during the process	425,000	$1,204,000	Units from Beg.WIP	25,000	$52,588
			Units Started and Completed	390,000	$1,107,449
			Total units completed and transferred	415,000	$1,160,037
			Units in End. WIP	35,000	$89,463
	450,000	$1,249,500		450,000	$1,249,500