Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,400 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $680,130 in total. The ending work in process inventory in January consisted of 2,200 units, which were 50% complete with respect to materials and 30% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows:

	Materials			Labor			Overhead
Cost per equivalent unit	$	14.40		$	3.30		$	7.20

Required:

1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.

2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.

3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.

4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Answer 1

				Total	Equivalent Units
1)	Particulars			Units	%	Material	%	Labor	%	Overhead
	Units completed and transferred			26400	100%	26400	100%	26400	100%	26400
	Units in Ending WIP			2200	50%	1100	30%	660	30%	660
				28600		27500		27060		27060

2)	Cost of Ending WIP
		Equi. Units	Rate	Amount
	Material	1100	$    14.40	$   15,840.00
	Labor	660	$      3.30	$     2,178.00
	Overhead	660	$      7.20	$     4,752.00
	Total			$   22,770.00

3)	Cost of Units Transferred
		Equi. Units	Rate	Amount
	Material	26400	$    14.40	$ 380,160.00
	Labor	26400	$      3.30	$   87,120.00
	Overhead	26400	$      7.20	$ 190,080.00
	Total			$ 657,360.00

4)	Reconciliation
	Total Cost to account for				$ 680,130.00
	Cost accounted for
	Cost of Ending WIP			$   22,770.00
	Cost of Units Transferred			$ 657,360.00	$ 680,130.00