Question

QualCo manufactures a single product in two departments: Cutting and Assembly. During May, the Cutting department completed a number of units of a product and transferred them to Assembly. Of these transferred units, 37,800 were in process in the Cutting department at the beginning of May and 154,800 were started and completed in May. May’s Cutting department beginning inventory units were 75% complete with respect to materials and 25% complete with respect to conversion. At the end of May, 51,600 additional units were in process in the Cutting department and were 75% complete with respect to materials and 20% complete with respect to conversion. The Cutting department had $487,080 of direct materials and $406,287 of conversion cost charged to it during May. Its beginning inventory included $74,375 of direct materials cost and $28,793 of conversion cost.

1.Compute the number of units transferred to Assembly.

2.2-4. Using the FIFO method, assign May’s costs to the units transferred out and assign costs to its ending work in process inventory. (Round "Cost per EUP" to 2 decimal places

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 Part 1) The number of units transferred = beginning inventory units+ started units-ending inventory units = 37800+154800 - 51600 = 141000 Units 1 2 4 Thus the correct answer units transferred to assembly = 141000 units 5 Part 2) 3 Particulars Statement of Equivalent Units FIFO Physical Units % Completion Material % Completion Conversion Cost Units completed and transferred out 1 From Beginning inventory 2 From units started (32300-4600) 3 Units in ending Inventory 4 Total equivalent units 37800 1032001 51600 192600 25 1001 75 94501 103200 38700 151350 75 100 201 28350 103200 1 0320 141870 Statement of cost per equivalent units 7 Particulars 3 Cost incurred during the period Total cost No. of equivalent Units 1 Cost per equivalent Unit 487080 487080 151350 3.22 406287 406287 141870 2.864

Cost of units transferred out 5 Beginning Inventory 5 cost in opening wip - Cost to complete beginning inventory ((9450*3.22)+(28350*2.86) 3 Cost of units started and completed (3.22+2.864)*103200) 103168 111601 627666 Total cost of units transferred out 842435 154100 2 Cost of units in ending inventory 3 ((38700*3.22)+(10320*2.864)) 5 Thus the final answer 5 Cost of units transferred out - Cost of units in ending inventory 842435 154100