Question

Cost of Units Completed and in Process

The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.

Work in Process—Assembly Department
Bal., 2,000 units, 55% completed	5,510	To Finished Goods, 46,000 units	?
Direct materials, 47,000 units @ $1.6	75,200
Direct labor	75,300
Factory overhead	29,350
Bal. ? units, 20% completed	?

a. Based on the above data, determine the different costs listed below.

If required, round your interim calculations to two decimal places.

1. Cost of beginning work in process inventory completed this period.	$
2. Cost of units transferred to finished goods during the period.	$
3. Cost of ending work in process inventory.	$
4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent.	$

b. Did the production costs change from the preceding period?

c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?

Answer 1

a.

Beginning inventory balance	5510
Labor [900*1.65]	1485
Overheads[ 900*0.65]	585
Cost of beginning work in process inventory completed this period	7580

Cost of beginning work in process inventory completed this period	7580
Materials cost [ 44000*1.6]	70400
Labor [44000*1.65]	72600
Overheads[ 44000*0.65]	28600
Cost of units transferred to finished goods during the period	179180

Materials cost [ 3000*1.6]	4800
Labor [3000*1.65]	990
Overheads[ 3000*0.65]	390
Cost of ending work in process inventory	6180

Beginning inventory balance	5510
Labor [900*1.65]	1485
Overheads[ 900*0.65]	585
Cost of beginning work in process inventory completed this period	7580
No of units	2000
Cost per unit of the completed beginning work in process inventory,	3.79

b. Yes, the production cost has changed. [ From 3.79 per unit to 3.9 per unit ]

c. Increased for the current period.