Question

The Polishing Department of Major Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process. Production: Beginning inventory 1.520 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 41,300; ending inventory of 7,400 units 10% complete as to conversion costs. Manufacturing costs: Beginning inventory costs, comprised of $21,600 of materials and $12,320 of conversion costs; materials costs added in Polishing during the month, $181.795; labor and overhead applied in Polishing during the month, $127,700 and $257,740, respectively. Your answer is incorrect. Compute the equivalent units of production for materials and conversion costs for the month of September. Materials Conversion Costs The equivalent units of production Your answer is partially correct. Compute the unit costs for materials and conversion costs for the month. (Round unit costs to 2 decimal places, e.g. 2.25.) Materials Conversion Costs Unit costs 4.75 $ Your answer is incorrect. Determine the costs to be assigned to the units transferred out and in process. (Round unit costs to 2 decimal places, e.g. 2.25 and final answers to O decimal places, eg. 1,225.) Transferred out $ Ending work in process $

Answer 1

Answer a.

	Materials	Conversion Costs
Total equivalent units of production	42,820 units	36,160 units

Explanation:

Units complete and transferred out = Beginning WIP inventory + Units started into production - Ending WIP inventory

= 1,520 + 41,300 - 7,400 = 35,420 units

	Materials	Conversion Costs
Units complete and transferred out	35,420 units	35,420 units
Work in process, September 30 7,400 * 100 % = 7,400 7,400 * 10% = 740	7,400 units	740
Total equivalent units of production	42,820 units	36,160 units

Answer b

	Materials	Conversion Costs
Unit costs	$4.75	$11.00

Explanation:

Unit costs for materials

= (Beginning inventory cost of materials + Costs of materials added to production during September) / Total equivalent units of Materials

= ($21,600 + $181,795) / 42,820 units = $4.75.

Unit costs for conversion

= (Beginning inventory cost of conversion + Costs of conversion added to production during September) / Total equivalent units of Conversion

= ($12,320 + $127,700 + $257,740) / 36,160 units = $11.00

Answer c.

Transferred out	$557,865
Ending work in process	$43,290

Explanation:

Cost assigned to transferred out units = Units complete and transferred out + (Unit costs for materials + Unit costs for conversion)

= 35,420 units * ($4.75 + $11.00) = $557,865.

Cost assigned to ending work in process units

= (Ending WIP inventory units * Unit costs for materials * 100%) + (Ending WIP inventory units * Unit costs for conversion * 10%)

= (7,400 units * $4.75 * 100 %) + (7,400 units * $11.00 * 10 %)

= $35,150 + $8,140 = $43,290.