Question

Do It! Review 16-4

In March, Kelly Company had the following unit production costs: materials $10 and conversion costs $8. On March 1, it had no work in process. During March, Kelly transferred out 29,000 units. As of March 31, 3,400 units that were 37% complete as to conversion costs and 100% complete as to materials were in ending work in process.

Compute the total units to be accounted for.

Total units

Compute the equivalent units of production.

		Materials		Conversion costs
The equivalent units of production

Prepare a cost reconciliation schedule, including the costs of materials transferred out and the costs of materials in process.

Cost Reconciliation Schedule
Costs accounted for
Transferred out			$
Work in process, March 31
Materials	$
Conversion costs
Total costs			$

Answer 1

Answer

• [1] Total units to be accounted for = 29000 units tramsferred out + 3400 ending units = 32,400 units
• [2] Equivalent units for:
  >Material = (29000 units x 100%) + (3400 x 100%) = 32400
  >Conversion cost = (29000 x 100%) + (3400 x 37%) = 30258
• [3]

Cost Reconciliation Schedule
Costs accounted for
Transferred out -29000 units x $ 18			$ 522,000
Work in process, March 31
Materials – 3400 x 100% x $ 10	$ 34000
Conversion costs – 3400 x 37% x $ 8	$ 10064		$ 44,064
Total costs			$ 566,064