Question

Superior Micro Products uses the weighted average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,100 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to 5711,360 in total. The ending work in process inventory in January consisted of 2,700 units, which were 60% complete with respect to materials and 40% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Cost per equivalent unit Materials Labor $ 13.70 $ 4.30 Overhead $ 7.90 Required: 1. Compute the equivalent units of materials, labor and overhead in the ending work in process inventory for the month 2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January 3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January 4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Answer 1

1. Equivalent units

	Material	Labor	Overhead
Equivalent unit	2,700*60% = 1,620	2,700*40% = 1,080	2,700*40% = 1,080

2. Cost of ending work in process inventory

	Material	Labor	Overhead	Total
Cost of ending work in process inventory	1,620*13.70 = 22,194	1,080*4.30 = 4,644	1,080*7.90 = 8,532	35,370

3. Cost of unit transferred out

	Material	Labor	Overhead	Total
Cost of unit transferred out	26,100*13.70 = 357,570	26,100*4.30 = 112,230	26,100*7.90 = 206,190

4. Cost reconciliation

	Total cost
Total Cost to be accounted for	711,360
Cost accounted as:
Unit transferred out Cost	675,990
Cost of ending WIP	35,370
Total cost accounted as	711,360