Question

D D Macros Properties lew dow Arrange All Split El Synchronous Scrolling Reset Window Position Window Switch Windows Macros SharePoint THIS is your "Bob - Homework": Ex 17-3 & Prob 17-1B & Prob 17-2B. This problem is NOT in your textbook Required: below this problem B (next page) are the "working papers" for you to complete and then submit to the instructor ... by the due date. Optional: Below the Prob B "working papers" (scroll 3 pages) are answers to similar, Prob A. If needed, refer to the Prob A to help you complete your problem B assignment E17-3 The ledger of American Company has the following work in process account. Work in Process Painting 5/1 Balance 3,590 5 /31 Transferred out 5/31 Materials Materials 5,160 5/31 Labor 5/31 Overhead 1,380 5/31 Balance ? 2.530 Production records show that there were 400 units in the beginning inventory, 30% com- plete, 1,600 units started, and 1,700 units transferred out. The beginning work in process had materials cost of $2,040 and conversion costs of $1,550. The units incending inventory were 40% complete. Materials are entered at the beginning of the painting process. Instructions (a) How many units are in process at May 31? (b) What is the unit materials cost for May? (c) What is the unit conversion cost for May? (d) What is the total cost of units transferred out in May? (e) What is the cost of the May 31 inventory? BEG Work In Process (May01) Started into production Total Units to be accounted for LESS ? END Work In Process (May 31)

Answer 1

Part A

Summary of Physical units
Units in beginning WIP inventory			400
Units started into production during month			1,600
Total unit to be accounted for			2,000
Less: Units completed and transferred out			1,700
Units in ending WIP inventory			300

Part B and C

	Answer B	Answer C
	Direct material	Conversion Cost
Units transferred out	1,700	1,700
Work in progress
300 units x 100%	300
300 units x 40%		120
Equivalent Units of production	2,000	1,820
	Answer B	Answer C
	Direct material	Conversion Cost
Beginning Work in progress	$        2,040	$          1,550
Add: Cost added	$        5,160	$          3,910
Total Costs	$        7,200	$          5,460
Divided by: Equivalent Units of production	2,000	1,820
Cost per Equivalent Unit (or Unit Costs)	$          3.60	$            3.00
Cost added in Conversion Cost = 2530+1380 = 3910

Part D

Combined Cost per Equivalent Unit (or Unit Costs) (3.60 + 3.00)		$            6.60
Transfeered out cost (1700 per unit x 6.60)		$        11,220

Part E

Work in progress
Material (300 units x 3.60)		$          1,080
Conversion Cost (120 units x 3)		$              360
Total Work in progress (May 30)		$          1,440

Alternative format to solve this question.

Equivalent Units of production
Particulars	Physical units	Direct material		Conversion Cost
		%	units	%	units
units in beginning WIP inventory	400	100%	400	100%	400
Units in Started and completed (1700-400)	1300	100%	1300	100%	1300
units in ending WIP inventory	300	100%	300	40%	120
Equivalent Units of production			2000		1820
Summary of cost to be accounted
	Direct material	Conversion Cost	Total
Cost in beginning WIP	2,040	1,550	3,590
Cost incurred during Month (Add)	5,160	3,910	9,070
total cost to be accounted for	7,200	5,460	12,660
cost per Equivalent Unit
total cost to be accounted for	7200	5460
Divided by: Equivalent Units of production	2000	1820
Cost per Equivalent Unit	3.60	3.00	6.60
Assign costs to units transferred out and units in ending WIP inventory
cost assigned to units transferred out
units completed and transferred out	1700	1700
Cost per Equivalent Unit	3.60	3.00
cost assigned to units transferred out	6120	5100	11,220
cost assigned to units ending work in progress
equivalent units in ending WIP inventory	300	120
Cost per Equivalent Unit	3.60	3.00
cost assigned to units ending work in progress	1080	360	1,440
Total cost assigned			12,660