Question

Overton Company has gathered the following information. 21,700 222,700 25,400 Units in beginning work in process Units started into production Units in ending work in process Percent complete in ending work in process: Conversion costs Materials Costs incurred: Direct materials Direct labor Overhead 60 % 100 % $ 109,980 $492,896 $186,400

Answer 1

(a) Equivalent units of production for:

Materials: 36,000

Conversion costs: 32,400

	Physical Units
Units in Beginning work in process	21,000
Units started in Production	222,700
Total Units to account for	243,700

		Equivalent Units
	Physical Units	Direct Materials	Conversion Costs
Units completed and transferred out	197,300	197,300	197,300
Units in ending work in process	25,400	25,400	15,240
Total Units accounted for	222,700	222,700	212,540

(b) Unit costs of production

	Direct Materials	Conversion Costs (Labor + OH)	Total
Beginning work in process	0	0	0
Costs added during the month	109,980	679,296	751,296
Total costs to be accounted for	109,980	679,296	751,296

	Direct Materials	Conversion Costs	Total
Total costs to be accounted for	109,980	679,296	751,296
Total equivalent units accounted for	222,700	212,540
Unit Costs of production	0.49	3.20	3.69
	(109,980 / 222,700)	(679,296 / 212,540)

(c) Assignment of cost to units transferred out and in process

	Total
Costs assigned to units transferred out	728,037
(197,300 x $3.69)
Costs assigned to ending work in process	61,214
(25,400 x $0.49) + (15,240 x $3.20)
Total costs accounted for	789,251

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