Question

Cost of Units Completed and in Process

The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.

Work in Process—Assembly Department
Bal., 9,000 units, 40% completed	72,360	To Finished Goods, 41,500 units	?
Direct materials, 40,000 units @ $6.80	272,000
Direct labor	80,000
Factory overhead	40,450
Bal., ? units, 30% completed	?

Cost per equivalent units of $6.80 for Direct Materials and $3.00 for Conversion Costs.

a. Based on the above data, determine the different costs listed below.

1. Cost of beginning work in process inventory completed this period	$
2. Cost of units transferred to finished goods during the period	$
3. Cost of ending work in process inventory	$
4. Cost per unit of the completed beginning work in process inventory (Rounded to the nearest cent.)	$

b. Did the production costs change from the preceding period?
Yes

c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?
Decrease

Answer 1

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Cost of Production Report
For the Period Ended		Equivalent Units
Unit information	Physical Units	Materials	Conversion
Units charged to production:
Opening Inventory in process	9,000.00
Units started during the period	40,000.00				Note B
Total units accounted for	49,000.00				Started and completed in the same period
					Goods finished in the period	41,500.00
Units to be assigned costs:					Less: Opening work in process	9,000.00
Opening Inventory in process	9,000.00	9,000.00	9,000.00		Started and completed in the same period	32,500.00
Started and completed in the same period	32,500.00	32,500.00	32,500.00	See note B
Goods transferred out in the period	41,500.00	41,500.00	41,500.00
Closing Inventory in process	7,500.00	7,500.00	2,250.00	This is closing units multiplied by % of completion
Total units to be assigned costs:	49,000.00	49,000.00	43,750.00
Cost Information				Total
Cost per equivalent unit		6.80	3.00	9.80
Costs allocated to completed and partially completed units
To complete opening inventory in process		61,200.00	27,000.00	88,200.00	This is answer a 1
Started and completed in the same period		221,000.00	97,500.00	318,500.00
Finished goods				406,700.00	This is answer a 2
Closing Inventory in process		51,000.00	6,750.00	57,750.00	This is answer a 3
Answer a 4
		61,200.00	27,000.00	88,200.00
Units		9,000.00	9,000.00	9,000.00
Cost per unit		6.80	3.00	9.80

Answer b
Yes the production costs change from the preceding period.
Answer c
Opening units	9,000.00
Direct material cost per unit	6.80
Direct material cost	61,200.00
Total cost	72,360.00
Conversions costs	11,160.00
% of completion	40%
Equivalent units	3,600.00
Conversions costs per unit of opening inventory	3.10
Current Conversions costs per unit	3.00
Decrease by	0.10