Question

3) Four Seasons Company makes snow blowers. Materials are added at the beginning of the process and conversion costs are uniformly incurred. At the beginning of September, the work-in-process is 40 percent complete and at the end of the month it is 60 percent complete for conversion costs. Other data for the month include: 1,500 2,000 3,000 Beginning work-in-process inventory units Units started units Units completed and placed in finished goods units Cost added during the period Cost of direct materials $245,000 Conversion costs $202,400 Beginning work-in-process costs: Materials $175,000 Conversion $76,000 Required: A) Determine the equivalent units of production for materials and conversion costs. B) Determine the cost per equivalent unit for materials and conversion costs. C) Prepare a production cost worksheet with supporting of process costing to show amount transferred out of WIP and the amount remaining in ending WIP.

Answer 1

	Physical Units	Direct Materials	Conversion
Work in process, beginning	1500
Started during period	2000
To account for	3500
Units completed	3000	3000	3000
Work in process, ending 60% Conversion	500	500	300
Equivalent Units	3500	3500	3300
	Totals	Direct Materials	Conversion
Work in process, beginning	251000	175000	76000
Costs added during period	447400	245000	202400
Total costs to account for	698400	420000	278400
Divided by equivalent units		3500	3300
Equivalent unit costs	204.36	120.00	84.36
Assignment of costs
Completed units   3000*204.36	6,13,090.91	360000	2,53,090.91
Work in process, ending	85,309.09	60000	25,309.09
Costs accounted for	6,98,400.00	4,20,000.00	2,78,400.00