Question

Cost of Units Completed and in Process The charges to Work in Process-Assembly Department for a period, together with concerning production, are as follows. All direct materials are placed in process att production Work in Process-Assembly Department Bal., 9,000 units, 40% completed 72,360 Th Finished Goods, 41,500 units Direct materials, 40,000 units @ 272,000 $6.80 Direct labor 80,000 Factory overhead 40,450 Bal., 2 units, 30% completed Cost per equivalent units of $6.80 for Direct Materials and $3.00 for Conversion Costs. a. Based on the above data, determine the different costs listed below. 1. Cost of beginning work in process inventory completed this period 2. Cost of units transferred to finished goods during the period

Answer 1

Solution :-

Closing Balance Unit = Opening + Introduced - Finished Goods

= 9000 + 40000 - 41500

= 7500 units

A(1). Cost of Beginning Work in Process Inventory Complete this Period :-

= opening Cost + Opening Equivalent Material Units * Cost per Unit + Opening Equivalent Overhead unit * Cost per unit

= $72360 + (9000*0%*$6.80) + (9000*60%*$3)

= $72360 + 0 + $16200

= $88560

A(2). Cost of units transfered to finished goods during the period:-

=Cost of Beginning Work in Process Inventory Complete + Cost of completed Goods

= $88560 + (32500*100%*$6.80) + (32500*100%*$3)

= $88560 + $221000 + $97500

= $407060

Completed Goods during the period = Total Units introduced - Closing units

= 40000 - 7500 = 32500 units

A(3). Cost of Ending Working in Process ;-

= (7500*100%*$6.80) + (7500*30%*$3)

= $51000 + $6750

= $57750

A(4). Cost of unit of the completed beginning work in process Inventory :-

= beginning work in process Inventory Cost / opening completed units

= $88560 / 9000 units

= $9.84 per unit

B). Yes, Production Cost change from the preceding period.

Production cost changed by = $9.84 - ($6.8 + $3) = 0.04 per unit