Question

3) Four Seasons Company makes snow blowers. Materials are added at the beginning of the process and conversion costs are uniformly incurred. At the beginning of September, the work-in-process is 40 percent complete and at the end of the month it is 60 percent complete for conversion costs. Other data for the month include: 1,500 2,000 3,000 Beginning work-in-process inventory units Units started units Units completed and placed in finished goods units Cost added during the period Cost of direct materials $245,000 Conversion costs $202,400 Beginning work-in-process costs: Materials $175,000 Conversion $76,000 Required: A) Determine the equivalent units of production for materials and conversion costs. B) Determine the cost per equivalent unit for materials and conversion costs. C) Prepare a production cost worksheet with supporting of process costing to show amount transferred out of WIP and the amount remaining in ending WIP

please make everything clear and show all thr steps

Answer 1

Solution A:

Four Seasons Company
Computation of Equivalent unit of Production
Particulars	Physical Units	Material	Conversion
Units to account for:
Beginning WIP	1500
Started into Production	2000
Total units to account for	3500
Units accounted for:
Unit completed & Transferred out	3000	3000	3000
Units in ending inventory:	500
Material (100%)		500
Conversion (60%)			300
Equivalent units of production	3500	3500	3300

Solution b:

Four seasons Company Computation of Cost per equivalent unit
Particulars	Material	Conversion	Total
Opening WIP	$175,000	$76,000	$251,000
Cost Added during Period	$245,000	$202,400	$447,400
Total cost to be accounted for	$420,000	$278,400	$698,400
Equivalent units of production	3500	3300
Cost per Equivalent unit	$120.00	$84.36

Solution C:

Four Seasons Company Computation of Cost of ending WIP and units completed & transferred out
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	500	300
Cost per equivalent unit	$120.00	$84.36
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$60,000	$25,309	$85,309
Units completed and transferred	3000	3000
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$360,000	$253,091	$613,091