Question

Polk Company manufactures basketballs. Materials are added at the beginning of the production process and conversion costs are incurred uniformly. Production and cost data for the month of July 2020 are as follows. Percent Complete 60% Units 500 1,000 600 40% Production Data-Basketballs Work in process units, July 1 Units started into production Work in process units, July 31 Cost Data-Basketballs Work in process, July 1 Materials Conversion costs Direct materials Direct labor Manufacturing overhead $750 600 $1,350 2.400 1.580 1.248

Answer 1

1
	Materials	Conversion
Units completed and transferred out	900	900	=1000+500-600
Work in process, ending:
600 X 100%	600
600 X 40%		240
Equivalent units	1500	1140
2
	Materials	Conversion
Work in process, July 1	750	600
Cost added during July	2400	2820
Total costs	3150	3420
Divide by Equivalent units of production	1500	1140
Cost per Equivalent unit	2.10	3.00