Question

Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2020 totaled $2,288,076 as follows. Work in process, November 1    Materials $79,000    Conversion costs 48,200 $127,200 Materials added 1,594,520 Labor 225,800 Overhead 340,556 Production records show that 34,600 units were in beginning work in process 30% complete as to conversion costs, 662,700 units were started into production, and 24,100 units were in ending work in process 40% complete as to conversion costs. Materials are entered at the beginning of each process.

Determine the equivalent units of production and the unit production costs for the Assembly Department. (Round unit costs to 2 decimal places, e.g. 2.25.) Materials Conversion Costs Equivalent Units Cost per unit $ $

Determine the assignment of costs to goods transferred out and in process. Costs accounted for:       Transferred out $ ________    Work in process, November 30       Materials $ ______________       Conversion costs ____________ _____________          Total costs $ ____________

Prepare a production cost report for the Assembly Department. (Round unit costs to 2 decimal places, e.g. 2.25 and other answers to 0 decimal places, e.g. 125.) RIVERA COMPANY Assembly Department Production Cost Report For the Month Ended November 30, 2020 Equivalent Units Quantities Physical Units Materials Conversion Costs Units to be accounted for    Work in process, November 1 ______    Started into production _____       Total units _____ Units accounted for    Transferred out _____ _____ _____    Work in process, November 30 _____ _____ _____       Total units _____ ______ ______ Costs Materials Conversion Costs Total Unit costs    Total Costs $ _____ $ ____ $ _____    Equivalent units ____ ____    Unit costs $ _____ $ _____ $ _____ Costs to be accounted for    Work in process, November 1 $ _____    Started into production _____       Total costs $ _____ Cost Reconciliation Schedule Costs accounted for    Transferred out $ _____    Work in process, November 30       Materials $ ____       Conversion costs _____ ____    Total costs $ ____

Answer 1

1) Under weighted average method, equivalent units are to be calculated only for units completed & transferred out and units lying as ending work in process as it is assumed that the units once entered into the process become integral part of total units and no segregation between units transferred from beginning work in process and introduced during current process. Conversion cost includes Labor + Overheads. So, Units in beginning inventory Add: Units added during the period Less: Units in ending inventory Units completed and transferred out 34,600 662,700 -24,100 673,200 Particulars Physical Units 673,200 24,100 697,300 % Materials 100% 100% Transferred to next process Ending work in process Equivalent Units of Production (EUP) EUP | EUP Materials Conversion Conversion 673,200 100% 673,200 24,100 40% 9,640 697,300 682,840 [673200 units x 100%; 673200 units x 100%] [24100 units x 100%; 24100 units x 40%] Conversion Cost per equivalent units of production Cost of beginning work in process Cost added during the period Total Materials Costs & Conversion Costs Equivalent units of Production (EUP) Cost per Equivalent units of Production Direct Materials $79,000 $1,594,520 $1,673,520 697,300 $2.40 [Conversion = $225,800 + $340,556 --> Labor + Overhead] $48,200 $566,356 $614,556 682,840 $0.90 [As computed EUP schedule presented above] [Materials = $1673520 / 697300 units = $2.4; Conversion = $614556 / 682840 = $0.9]

2) $2,221,560 Costs accounted for: Transferred out Work in process, November 30: Materials Conversion costs Total costs $57,840 $8,676 $66,516 $2,288,076 Workings: Cost of goods completed & transferred EUP | Totals Cost per EUP $2.40 $0.90 Materials - Current Cost Labor - Current Cost Total Cost of goods completed & transferred 673,200 673,200 $1,615,680 [673200 units x $2.4] $605,880 1673200 units x $0.9) $2,221,560 Cost of ending work-in-process EUP Totals Cost per EUP $2.40 $0.90 Materials Labor Total cost of ending work-in-process 24,100 9,640 $57,840 $8,676 $66,516 [24100 units x $2.4] [9640 units x $0.9]

RIVERA COMPANY Assembly Department - Production Cost Report For the Month Ended November 30, 2020 Equivalent Units Physical Units to be accounted for Materials Conversion Units Work in process, November 1 34,600 Started into production 662,700 Total units 697,300 Units accounted for Transferred out 673,200 673,200 673,200 Work in process, November 30 24,100 24,100 9,640 Total units 697,300 697,300 682,840 Materials Conversion Costs Unit costs Total Costs Equivalent units Unit costs $1,673,520 697,300 $2.40 $614,556 682,840 $0.90

$127,200 [$79000+ $48200] $2,160,876 ($1594520 + $566356] $2,288,076 Costs to be accounted for Work in process, November 1 Started into production Total costs Cost Reconciliation Schedule Costs accounted for Transferred out Work in process, November 30: Materials Conversion costs Total costs $2,221,560 $57,840 $8,676 $66,516 $2,288,076