Question

answer and explanation

24) The following information is available for Department 2 of Lake Corporation during March Units: Work in process inventory, March 1 (80% complete as to direct materials, 30% complete as to conversion costs) Transferred in from Dept. 1 in March Completed during March Work in process inventory, March 31 (50%, complete for direct materials, 10%, complete for conversion costs) 42,000 200,000 228,000 14,000 Costs: Work in process inventory, March 1 Direct materials Conversion Transferred-in Transferred in from Dept. 1 in March Direct materials added in March Conversion costs added in March $ 68,950 146,200 94,000 1.600.000 906,300 542,000 Compute the following using the weighted average method in your calculations: a) Equivalent units for direct materials, conversion costs, and transferred-in costs b) Unit costs for direct materials, conversion costs, and transferred-in equivalent units c) Total cost of units transferred to finished goods d) Total cost of ending work in process inventory on March 31 in Department 2

Answer 1

Solutions:

IN Solution a: AR SK Units Completed and transferred out units of Ending work in process Equivalent units of production Equivalent units of production (EUP) - Weighted Average method Units % Transferred in EUP-Transferred in % material EUP-Materials 228000 100% 228000 100% 228000 14000 100% 14000 50% 7000 242000 235000 ConversionEUP- Conversion 100% 228000 10% 1400 229400 SOLUTION b: Cost per Equivalent unit: Cost of Beginning Work in Process Cost added during June Total Costs /Equivalent units of Production Cost per Equivalent unit of Production Transferred in $94,000 $1,600,000 $1,694,000 242000 $7.00 Material $68,950 $906,300 $975,250 235000 Conversion $146,200 $542,000 $688,200 229400 $3.00 $4.15 SOLUTION C: Cost of Units Transferred Out Transferred in Materials Conversion Total transferred out 228000 228000 228000 Cost per EUP $7.00 $4.15 $3.00 Total Cost $1,596,000 $946,200 $684,000 $3,226,200 SOLUTION d: Cost of ending work in process Transferrd in materials Conversion Total Ending work in process EUP 14000 7000 1400 Cost per EUP $7.00 $4.15 $3.00 Total Cost $98,000 $29,050 $4,200 $131,250 30 32 33 Sheet578 Sheet578 (4) Sheet578 (6) Sheet578 (5) Sheet21 (2) Sheet5 (2) Sheet291 (2) Sheet2 111 0