Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,600 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $700,860 in total. The ending work in process inventory in January consisted of 3,500 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: Materials $ 13.80 Labor $ 3.50 Overhead $ 8.30 Cost per equivalent unit 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) Labor Overhead Materials 2,100 Equivalent unit of production 1,400 1,400 Working Notes Materials Labor Overhead Whole Units % Completed Equivalent Units (A) (B) (AⓇB) 3,500 60% 2,100 3,500 40% 1,400 3,500 40% 1,400 2) Total Materials Labor $ 28,980 $ Cost of ending work in process inventory Overhead 4,900 $ 11,620 $ 45,500 Working Notes Materials Labor Overhead Equivalent units Cost per unit Cost (A) (B) 2,100 $ 13.80 $ 1,400 $ 3.50 $ 1,400 $ 8.30 $ (A x B) 28,980 4,900 11,620

3) Materials Labor $ 353,280 $ Overhead Total 89,600 $ 212,480 $ Cost of units completed & transferred out 655,360 Working Notes Materials Labor Overhead Units transferred Cost per unit Cost (A) (B) 25,600 $ 13.80 $ 25,600 $ 3.50 $ 25,600 $ 8.30 $ (AⓇB) 353,280 89,600 212,480 $ 700,860 4) Cost Reconciliation Total cost to be accounted for Cost accounted for as follows: Cost of units completed & transferred out Cost of ending work in process inventory Total cost accounted for $ 655,360 45,500 700,860 $

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