Question

Superior Micro Products uses the weighted average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,200 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $730,011 in total. The ending work in process inventory in January consisted of 2,300 units, which were 50% complete with respect to materials and 30% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Materials $ 14.50 Labor $ 5.00 Overhead $ 7.40 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) 1) Direct material 1,150 Labor 690 Overheads 690 Equivalent units in Closing Work in process Equivalent units - Weighted Average Method % EUP- EUP- Units Direct Direct Conversion Conversion Material Material Units completed and transferred 26,200 100% 26,200 100% 26,200 Ending Work in process 2,300 50% 1,150 30% 690 Equivalent Units of Production 27,350 26,890 2) Cost of Ending Work in process Total Cost Equivalent units in Closing Work in process Equivalent cost per unit Cost of Ending Work in process Direct material 1,150 $14.50 $16,675 Labor Overheads 690 690 $5.00 $7.40 $3,450 $5,106 $25,231 3) Cost of completed units and transferred out Total Cost Units completed and transferred out Equivalent cost per unit Cost of completed units and transferred out Direct material 26,200 $14.50 $379,900 Labor Overheads 26,200 26,200 $5.00 $7.40 $131,000 $193,880 $704,780 ) 4) Cost Reconciliation Report For The Month of January Cost to account for: Cost of Beginning WIP and Cost added Total cost to account for $730,011 $730,011 Cost accounted for: Cost of goods completed and transferred out Cost of Ending work in process Total cost accounted for $704,780 $25,231 $730,011