Question

The ledger of American Company has the following work in process account. ? Work in Process-Painting 5/1 Balance 3,790 5/31 Transferred out 5/31 Materials 5,650 5/31 Labor 3,330 5/31 Overhead 2,080 5/31 Balance Production records show that there were 570 units in the beginning inventory, 30% complete, 1,630 units started, and 1,530 units transferred out. The beginning work in process had materials cost of $2,440 and conversion costs of $1,350. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process. Your answer is correct. How many units are in process at May 31? Work in process, May 31 679) units

Answer 1

Beginning process inventory Units started in the period Total to be accounted for Less : Transferred out Ending process inventory units at May 31 570 1630 2200 1530 L 670 Beginning process material cost Add: Material Total Material Equivalent unit (1530+670) $2.440 $5.650 $8,090 2.200 Unit material cost= Total material cost Equivalent unit $8090 2200 = $3.67

Compute unit conversion cost: Beginning conversion cost Add: Labor Add: Overhead Total Conversion cost $1,350 $3,330 $2,080 6,760 Tranferred out units Ending process (670 x 40% Total 1530 268 1798 6760 Unit conversion cost = 1798 = $3.75 Compute total cost of units transferred out: 1530 unitsx($3.67+$3.75)=$11352

Compute cost of may inventory: Material (670 units $3.67) Conversion (268 × $3.75) Total cost $2,459 $1,005 $3,464