Question

Department O receives material from department N for further processing. It does not add any material to the product. Conversion costs are incurred evenly throughout production. No WIP existed at the beginning of the month. During the month, 6,000 units costing $9,000 were transferred in. At the end of the period, 5,000 were completed and transferred to department P. Ending WIP inventory was 50% complete. Processing costs in department O for the current period were $17,050.

a) Calculate the cost for equivalent units completed during the period. (Round equivalent cost per unit to 4 decimal places, e.g. 25.1252 and final answer to 0 decimal places, e.g. 125.)

  Cost for equivalent units completed= $

b) Calculate the cost for ending WIP (Round equivalent cost per unit to 4 decimal places, e.g. 25.1252 and final answer to 0 decimal places, e.g. 125.)

Cost of ending WIP= $

Answer 1

Answers

• Working

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	5,000	100%	5,000	100%	5,000
Units of ENDING WIP	1,000	100%	1,000	50%	500
Equivalent Units of Production			6,000		5,500
COST per EUP			Material		Conversion
Cost of Beginning WIP			$                          -		$                                                 -
Cost incurred during the period			$             9,000.00		$                                  17,050.00
Total Costs		Costs	$             9,000.00	Costs	$                                  17,050.00
Equivalent units of production		EUP	6,000	EUP	5,500
Cost per EUP			$              1.50000		$                                      3.10000

• Requirement [a]

Cost for equivalent units completed = $ 23000

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	5,000	$                      1.50	$             7,500.00
- Conversion	5,000	$                      3.10	$          15,500.00
Total Cost transferred Out				$              23,000.00

• Requirement [b]
  Cost of ending WIp = $ 3050

Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	1,000	$                      1.50	$             1,500.00
- Conversion	500	$                      3.10	$             1,550.00
Total cost of ending WIP				$                 3,050.00