Question

1. 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., 9,000 units, 40% completed	72,360	To Finished Goods, 41,500 units	?
   Direct materials, 40,000 units @ $6.80	272,000
   Direct labor	80,000
   Factory overhead	40,450
   Bal., ? 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	$
   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?
   Yes

   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?
   Decrease

   Feedback

Answer 1

Part A

1. Cost of beginning work in process inventory completed this period = 5400*3 = $16200

2. Cost of units transferred to finished goods during the period = (32500*6.80)+(37900*3) = $334700

3. Cost of ending work in process inventory = (7500*6.80)+(2250*3) = $57750

4. Cost per unit of the completed beginning work in process inventory = (72360+16200)/9000 = $9.84

Part B

Yes

Part C

Increase

(it increases by $0.04 (9.84-9.80)

Description	Amount
Number of units in work in process at the beginning of the period	9000
Number of units placed during the period	40000
Less: number of units finished in work in process during the period	(41500)
Number of units in work in process at the end of the period	7500

Description	Whole units	Equivalent units
		Direct materials	Conversion
Beginning work in process inventory (9000*(1-40%))	9000	0	5400
Started and completed (41500-9000)	32500	32500	32500
Transferred	41500	32500	37900
Ending work in process inventory (7500*30%)	7500	7500	2250
Total equivalent units	49000	40000	40150

	Cost per Equivalent unit
	Direct materials	Conversion
Total cost incurred	272000	120450
Total equivalent units	40000	40150
Cost per Equivalent unit	$6.80	$3.00

80000+40450 = 120450