Question

HATSUIT CUPULUTUS te wees-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Beginning work in process inventory: Units in beginning work in process inventory.............. Materials costs Conversion costs..... Percent complete with respect to materials.... Percent complete with respect to conversion Units started into production during the month.. Units transferred to the next department during the month ...................... Materials costs added during the month. Conversion costs added during the month ..... Ending work in process inventory: Units in ending work in process inventory Percent complete with respect to materials. Percent complete with respect to conversion 200 $2,200 $1,000 50% 10% 6,500 6,100 $135,000 $312,600 600 80% 6096 Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error. carry out all computations to at least three decimal places. The cost per equivalent unit for materials for the month in the first processing department is closest to

Answer 1

Answer to first question in the list (Hanson Corporation): 1) Cost per equivalent unit - Materials 2) Cost per equivalent unit - Conversion 3) Cost of goods transferred to second department $20.8511 $48.5449 $423,316 Workings: Under weighted average method, equivalent units are to be calculated only for units completed & transferred out and units lying as ending work in process as it is assumed that the units once entered into the process become integral part of total units and no segregation between units transferred from beginning work in process and introduced during current process. Conversion cost includes Labor + Overheads. So, Physical units of production: Units in beginning inventory Add: Units started during current period Less: Units completed and transferred out Units in ending inventory 200 6,500 -6,100 600

Equivalent Units of Production (EUP) % / EUP- Particulars Whole Units Materials Materials Completed and transferred 6,100 100% 6,100 Ending work in process 600 80% 480 Equivalent Units of Production (EUP) 6,700 6,580 % EUP- Conversion Conversion 100% 6,100 60% 360 6,460 [6100 units x 100%; 6100 units x 100%] [600 units x 80%; 600 units x 60%] Cost per equivalent units of production Cost of beginning work in process Cost added during the period Total Materials Costs & Conversion Costs Divided by Equivalent units of Production (EUP) Cost per Equivalent units of Production Materials $2,200 $135,000 $137,200 6,580 $20.8511 Conversion $1,000 $312,600 $313,600 6,460 [As computed EUP schedule presented above] $48.5449_[$137200 / 6580 units = $20.8511; $313600 / 6460 units = $48.5449] Cost of goods completed & transferred EUP Totals Cost per EUP $20.8511 $48.5449 Materials Conversion Total Cost of goods completed & transferred 6,100 6,100 $127,192 [6100 units x $20.8511] $296,124 ][6100 units x $48.5449] $423,316