Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,400 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $690,904 in total. The ending work in process inventory in January consisted of 2,800 units, which were 70% complete with respect to materials and 50% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Materials Labor Overhead $13.40 4.50 7.60 Cost per equivalent unit 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

Calculate equivalent unit

	Material	Labor	Overhead
Unit Completed and transferred out	25400	25400	25400
Ending work in process unit	2800*70% = 1960	2800*50% = 1400	1400
Equivalent unit of production	27360	26800	26800

Cost of ending work in process

	Material	Labor	Overhead	Total
Cost of ending work in process	1960*13.40 = 26264	1400*4.50 = 6300	1400*7.60 = 10640	43204

Cost of unit completed and transferred out

	Material	labor	Overhead	Total
Cost of unit completed and transferred out	25400*13.40 = 340360	25400*4.50 = 114300	25400*7.60 = 193040	647700

Cost reconciliation

Total Cost to be accounted for	690904
Cost accounted for as follows
Cost of unit completed and transferred out	647700
Cost of ending work in process	43204
Total Cost accounted for	690904