Question

EX 20-11 Equivalent units of production and related costs The charges to Work in Process---Assembly Department for a period, together with infor mation concerning production, are as follows. All direct materials are placed in process at the beginning of production. Work in Process- Assembly Department Bal., 5,000 units, 35% completed 10,475 To Finished Goods, 105,500 units Direct materials, 108,000 units @ $1.50 162,000 Direct labor 145,300 Factory overhead 47,525 Bal.? units, 45% completed Determine the following: a. The number of units in work in process inventory at the end of the period. b. Equivalent units of production for direct materials and conversion. c. Costs per equivalent unit for direct materials and conversion. d. Cost of the units started and completed during the period.

The red asterisks are the ones that are incorrect. so I need the correct values. Thanks

Answer 1

b.

Equivalent Units are calculated by multiplying the no. of partially converted units with percentage of completion done.

So, while calculating the equivalent units in direct material will be equal to 5000 x 65% = 3250 (Instead of 5000) for Inventory in progress.

Consequently answer of equivalent units in direct material will be equal to 3250+100500=103750 (instead of 105500) for Inventory transfer to Finished goods.

Subsequently, total units in Direct material will be equal to 107125 (instead of 113000).

c .

In total no. of equivalent units shall be replaced by 107125 (instead of 113000)

because of the answer calculated in part b above.

Subsequently cost per equivalent unit will change being 162000/107125 = $1.51 per equivalent unit (instead of 1.43).

d.

As the answer in c part changed. Direct material unit cost shall be 1.51(instead of 1.43).

Subsequently, total unit cost shall be 3.31(instead of 3.23).

And cost of units started and completed shall be equal to 332655(instead of 325615).