Question

please answer the followinf question.

Process Costing (Cornerstone Pages): The mixing department of Seville Company uses two processes, Blending and Cooking. The following information pertains to the Blending Department for February. Units in Beginning Work in Process (40% complete) Units Completed and Transferred Out Units in Ending Work in Process (60% complete) 100,000 370,000 50,000 Production Costs are as follows: Cost for Beginning WIP: Materials Conversion Total: $20,000 $40,000 $60,000 Current Costs: Materials Conversion Total: $200,000 $350,000 $550,000 * Note: with respect to material, all material costs are added at the beginning of the process Required: 1] Prepare a Physical Flow Schedule 2] Prepare a Schedule of Equivalent Units 3] Compute the Cost per Equivalent Units 4] Compute the Cost of Goods Transferred Out and the Cost of EWIP

Answer 1

1)		Physical flow schedule
		Units to account for
		Units in BWIP			100000
	Add:	Units Started			320000
		Total units to account for			420000
		Units accounted for
		Started and completed			270000
	Add:	Units from BWIP			100000
		Total units completed and			370000
		transferred out
	Add:	Units in EWIP			50000
		Total units accounted for			420000

2)	Schedule of Equivalent Units
				Materials	Conversion
	Units completed			270000	270000
	Units in EWIP x % Complete
	Materials	(50000 x 100%)		50000
	Conversion	(50000 x 60%)			30000
	Total Equi. Units of output			320000	300000
3)	Cost per equivalent units
	Material unit cost		$          0.69	[($ 20000 + $ 200000)/320000]
Add:	Conversion cost		$          1.30	[($ 40000 + $ 350000)/300000]
	Total unit cost		$          1.99

4)
a)	Cost of Goods transferred out
	Materials	($ 0.69 x 270000)		$ 185,625.00
	Conversion	($ 1.30 x 270000)		$ 351,000.00
				$ 536,625.00
b)	Cost of EWIP
	Materials	($ 0.69 x 50000)		$   34,375.00
	Conversion	($ 1.30 x 30000)		$   39,000.00
				$   73,375.00
5)	Cost reconciliation
	Costs to account for:
	Costs from BWIP			$   60,000.00
Add:	Costs incurred during the period			$ 550,000.00
	Total costs to account for			$ 610,000.00
	Costs accounted for:
	Costs of goods transferred out			$ 536,625.00
Add:	Costs of EWIP			$   73,375.00
	Total costs accounted for			$ 610,000.00