Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,400 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $688,562 in total. The ending work in process inventory in January consisted of 3,100 units, which were 60% complete with respect to materials and 40% 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	$	13.90		$	4.20		$	6.50

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

Answers

• Requirement 1

Requirement 1
	Material	Labor	Overhead
Units completed	26,400	26,400	26,400
Units in ending WIP	1,860	1,240	1,240
Total Equivalent units	28,260	27,640	27,640

Requirement 1
	Material	Labor	Overhead
Units completed	=26400*100%	=26400*100%	=26400*100%
Units in ending WIP	=3100*60%	=3100*40%	=3100*40%

• Other requirements

Requirement 2
		Material	Labor	Overhead	Total
A	Cost per Equivalent unit	$               13.90	$                                 4.20	$                      6.50
B	Equivalent units	1,860	1,240	1,240
C = A x B	Cost of ending WIP Inventory	$      25,854.00	$                         5,208.00	$              8,060.00	$          39,122.00

Requirement 3
		Material	Labor	Overhead	Total
A	Cost per Equivalent unit	$               13.90	$                                 4.20	$                      6.50
B	Equivalent units	26,400	26,400	26,400
C = A x B	Cost of units transferred	$    366,960.00	$                    110,880.00	$         171,600.00	$        649,440.00

Requirement 4
Cost to be accounted for:
Cost of beginning WIP invemtory and Cost added		$                    688,562.00
Cost accounted for:
Cost of ending WIP	$      39,122.00
Cost of units transferred	$    649,440.00
Total cost accounted for		$                    688,562.00