Question

The Smelting Department of Polzin Company has the following production and cost data for September.

Production: Beginning work in process 2,100 units that are 100% complete as to materials and 20% complete as to conversion costs; units started and finished 8,900 units; and ending work in process 900 units that are 100% complete as to materials and 40% complete as to conversion costs.

Manufacturing costs: Work in process, September 1, $16,000; materials added $59,780; labor and overhead $140,032.

Polzin uses the FIFO method to compute equivalent units.

Compute the unit costs for the month. (Round unit costs to 2 decimal places, e.g. 2.25.)

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer 2 3 Part 1) Firstly we have to calculate the equivalent units Statement of Equivalent units Physical units 2100 7 Particulars 3 Beginning inventory units completed and transferred 2 0 Units started and completed (520000-40000) 1 Ending inventory Equivalent Units Direct Material conversion Cost 0 1680 (2100*80%) 8900 8900 900 360 (900*40%) 9800 10940 0900 900 3 Equivalent Units 11900 Calculation of cost per equivalent unit Direct Material Conversion Cost Unit Cost 8 Cost incurred during the period 59780 140032 9 Total equivalent units accounted for 9800 L 10940 0 Cost per equivalent unit 6.10 12.80 18.90 Thus Final Answer Direct Material Conversion Cost Total Unit Cost 6.10 12.80 18.90 4 Cost per equivalent unit