Question

Yarmouth Company produces a liquid solvent in two departments: Mixing and Finishing. Accounting records at Yarmouth show the following information for Finishing operations for February (no new material is added in the Finishing Department):

WIP inventory—Finishing
Beginning inventory (10,400 units, 20% complete with respect to Finishing costs)
Transferred-in costs (from Mixing)	$	117,520
Finishing conversion costs		3,980
Current work (98,800 units started)
Mixing costs		908,960
Finishing costs		445,984

The ending inventory has 14,400 units, which are 60 percent complete with respect to Finishing Department costs and 100 percent complete for Mixing Department costs.

Answer 1

Solution:

Yarmouth Company
Production Cost report - Finishing Department
Computation of Equivalent unit of Production
Particulars	Physical Units	Mixing	Finishing
Units to account for:
Beginning WIP	10400
Started into Production	98800
Total units to account for	109200
Units accounted for:
Unit completed & Transferred out	94800	94800	94800
Units in ending inventory:	14400
Mixing (100%)		14400
Finishing (60%)			8640
Equivalent units of production	109200	109200	103440

Computation of Cost per equivalent unit of Production and cost of units completed and transferred out and Ending Work In Process
Particulars	Mixing	Finishing	Total
Opening WIP	$117,520	$3,980	$121,500
Cost Added during Period	$908,960	$445,984	$1,354,944
Total cost to be accounted for	$1,026,480	$449,964	$1,476,444
Equivalent units of production	109200	103440
Cost per Equivalent unit	$9.40	$4.35
Costs accounted for as follows:
Cost of unit transferred out	$891,120	$412,380	$1,303,500
Ending Work In Process	$135,360	$37,584	$172,944
Total costs accounted for	$1,026,480	$449,964	$1,476,444