Question

The ledger of American Company has the following work in process account.

Work in Process—Painting
5/1	Balance	3,690	5/31	Transferred out	?
5/31	Materials	6,820
5/31	Labor	5,262
5/31	Overhead	1,280
5/31	Balance	?

Production records show that there were 500 units in the beginning inventory, 30% complete, 1,800 units started, and 1,400 units transferred out. The beginning work in process had materials cost of $2,840 and conversion costs of $850. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

How many units are in process at May 31?

Work in process, May 31

enter a number of units in process at May 31

units

What is the unit materials cost for May? (Round unit cost to 2 decimal places, e.g. 2.25.)

The unit materials cost for May

$enter a dollar amount of the unit materials cost for May rounded to 2 decimal places

What is the unit conversion cost for May? (Round unit cost to 2 decimal places, e.g. 2.25.)

The unit conversion cost for May

$enter a dollar amount of the unit conversion cost for May rounded to 2 decimal places

What is the total cost of units transferred out in May?

The total cost of units transferred out in May

$enter a dollar amount of the total cost of units transferred out in May

What is the cost of the May 31 inventory?

Work in process

$enter a dollar amount of the cost of the inventory on May 31

Answer 1

Answers

• [1]
  WIP May 31 = 900 units

Units Reconciliation
Units to account for:
Beginning WIP	500
Units started this period	1,800
Total Units to account for	2,300
Total Units accounted for:
Completed & Transferred out	1,400
Ending WIP [2300 - 1400]	900 ANSWER
Total Units accounted for	2,300

• [2]

Unit Material cost for May = $ 4.20

• [3]
  unit conversion cost = $ 4.20
• Working for [2] and [3]

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	1,400	100%	1,400	100%	1,400
Units of ENDING WIP	900	100%	900	40%	360
Equivalent Units of Production			2,300		1,760
COST per EUP			Material		Conversion
Cost of Beginning WIP			$             2,840.00		$                                        850.00
Cost incurred during the period			$             6,820.00		$                                    6,542.00
Total Costs		Costs	$             9,660.00	Costs	$                                    7,392.00
Equivalent units of production		EUP	2,300	EUP	1,760
Cost per EUP			$              4.20000		$                                      4.20000

• [4]

Total cost of units transferred out = $ 11760

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	1,400	$                      4.20	$             5,880.00
- Conversion	1,400	$                      4.20	$             5,880.00
Total Cost transferred Out				$              11,760.00

• [5]
  Work in Process inventory = $ 5292

Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	900	$                      4.20	$             3,780.00
- Conversion	360	$                      4.20	$             1,512.00
Total cost of ending WIP				$                 5,292.00