Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,800 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $709,425 in total. The ending work in process inventory in January consisted of 2,900 units, which were 50% complete with respect to materials and 30% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows:

	Materials			Labor			Overhead
Cost per equivalent unit	$	13.80		$	4.60		$	7.90

Required:

1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.

2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.

3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.

4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Answer 1

1		Material	Labor	Overhead
	Equivalent Units	1,450.00	870.00	870.00
2		Material	Labor	Overhead
	Cost of ending inventory work in process	$ 20,010	$ 4,002	$ 6,873
3		Material	Labor	Overhead
	Cost of units transferred to next department	$ 356,040	$ 118,680	$ 203,820
4	Cost Reconciliation	$
	Total Cost to be accounted for	7,09,425.00
	Cost accounted for as follows :
	Cost of units transferred out	6,78,540.00
	Cost of ending Work in process	30,885.00
	Total cost accounted for	7,09,425.00
	Working
1	Calculation of Equivalent Units
	Equivalent Units = Ending Work in Process * % of Completion
	Material = 2,900 units * 50% = 1,450 units
	Labor = 2,900 units * 30 % = 870 units
	Overhead = 2,900 units * 30 % = 870 units
2	Cost of Ending work in process inventory = Equivalent units * Cost per equivalent inventoey
	Material = 1,450 * $ 13.80 = $ 20,010
	Labor = 870 units * $ 4.6 = $ 4,002
	Overhead = 870 units * $ 7.90 = $ 6,873
3	Cost of units transferred to next department = completed units * Cost per equivalent inventoey
	Material = 25,800 * $ 13.80 = $ 356,040
	Labor = 25,800 * $ 4.6 = $ 118,680
	Overhead = 25,800 * $ 7.90 = $ 203,820