Question

1. Mickey Mouse Company had zero units in its Work in Process Inventory. During the period it completed and transferred out 25,000 units and there were 5,000 units left in work in process inventory. The ending work in process were 100 % complete in materials and 40% complete as to conversion cost.

Required: i. How many units were in production during the period?

ii. Compute equivalent units for Materials and Conversion Cost under the Weighted Average Method.

iii. If total materials cost is $90,000 and total conversion cost is $71,000 at the end of the period.

Compute: a. The cost of goods completed and transferred out.

b. The total cost of ending work in process inventory.

Answer 1

i) Units in rpduction during period = 25,000 + 5,000 Units in rpduction during period = 30,000 ii) Materials Conversion costs 30,000 27,000 Total Equivalent units iii) Cost of goods completed and trasnferred Cost of ending work in process $ $ 140,741 20,259 Working Note:

A B D E с Equivalent Units Physical units Materials Conversion costs 0 1 2 Quantities 3 Units to be accounted for 4 Work in process, June 1 5 Started into production 6 Total units 7 8 Units accounted for 9 Transferred out 10 Work in process, June 30 11 Total units 30000 30000 25000 5000 30000 25000 5000 30000 25000 2000 27000 12 Materials Conversion costs Total $ 90,000 $ 30000 $ 3.0000 $ 71,000 $ 161,000 27000 2.6296 $ 5.6296 13 Costs 14 Unit costs 15 Total Costs 16 Equivalent units 17 Unit costs 18 19 20 Cost Reconciliation Schedule 21 Costs accounted for 22 Transferred out 23 Work in process, June 30 24 Materials 25 Conversion costs 26 Total costs $ 140,741 $ $ 15,000 5,259 $ 20,259 $ 161,000

A E B с D Equivalent Units Physical units Materials Conversion costs 0 1=25000+5000 =+B4+B5 25000 5000 =+B9*100% =+B9*100% =+B10*100% =+B10*40% =+C9+C10 =+D9+D10 =+B9+B10 Materials Conversion costs Total 1 2 Quantities 3 Units to be accounted for 4 Work in process, June 1 5 Started into production 6 Total units 7 8 Units accounted for 9 Transferred out 10 Work in process, June 30 11 Total units 12 13 Costs 14 Unit costs 15 Total Costs 16 Equivalent units 17 Unit costs 18 19 20 Cost Reconciliation Schedule 21 Costs accounted for 22 Transferred out 23 Work in process, June 30 24 Materials 25 Conversion costs 26 Total costs =+C15+D15 90000 71000 =+C11 =+D11 =+C15/C16 =+D15/D16 =+C17+D17 =+B9*E17 =+C10*C17 =+D10*D17 =+D24+D25 =+E22+E25