Question

QualCo manufactures a single product in two departments: Cutting and Assembly. During May, the Cutting department completed a number of units of a product and transferred them to Assembly. Of these transferred units, 39,100 were in process in the Cutting department at the beginning of May and 166,500 were started and completed in May. May’s Cutting department beginning inventory units were 60% complete with respect to materials and 40% complete with respect to conversion. At the end of May, 52,900 additional units were in process in the Cutting department and were 60% complete with respect to materials and 20% complete with respect to conversion. The Cutting department had $556,088 of direct materials and $461,242 of conversion cost charged to it during May. Its beginning inventory included $75,675 of direct materials cost and $30,093 of conversion cost.

Answer 1

1. Units finished from opening units=39,100

Units started and completed during May=166,500

Total units transferred and completed=39100+166500=205,600

Therefore, total units transferred to Assembly=205,600 units

2.4

Equivalent units of production(EUP)- FIFO method
	Units	%Materials	EUP-Materials	% Conversation	EUP-Conversation
Finished from opening wip	39,100	40	15,640	60	23,460
Started and finished	166,500	100	166,500	100	166,500
Closing work in progress	52,900	60	31,740	20	10,580
Total units	258,500		213,880		200,540
Cost per equivalent unit of production			Materials		Conversion
Cost incurred during the process		Costs	556,088	Costs	461,242
Equivalent units of production		EUP	213,880	EUP	200540
Cost per equivalent unit of production			2.60		2.30
Total costs accounted for:
Beginning inventory cost:				105,768
Cost to complete units in beginning inventory	EUP	Cost per EUP	Total cost
Direct materials	15,640	2.60	40,664
Conversion	23,460	2.30	53,958
Total cost to complete beginning inventory			94,622	94,622
Cost of units started and completed	EUP	Cost per EUP	Total cost
Direct materials	166,500	2.60	432,900
Conversion	166,500	2.30	382,950
Total cost of units started and completed			815,850	815,850
Total cost of units transferred out				1,016,240
Cost of ending work in process	EUP	Cost per EUP	Total cost
Direct materials	31740	2.60	82,524
Conversion	10580	2.30	24,334
Total cost of ending work in process			106,858	106,858
Total costs accounted for				1,123,098