Question

Superior Micro Products uses the weighted average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,400 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $708,640 in total. The ending work in process inventory in January consisted of 3,200 units, which were 70% complete with respect to materials and 50% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Materials $ 13.50 Cost per equivalent unit Labor $ 4.70 Overhead $ 6.80 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

Solution

	Material	Labor	Overhead
Equivalent units	28,640	28,000	28,000

.

	Material	Labor	Overhead	Total
Cost of ending work in process	$         30,240.00	$          7,520.00	$       10,880.00	$       48,640.00

.

	Material	Labor	Overhead	Total
Cost of Units Completed and transferred out	$       356,400.00	$      124,080.00	$     179,520.00	$     660,000.00

.

Cost reconciliation
Total cost to be accounted for	$       708,640.00
Costs accounted for as follows
Cost of ending work in process	$         48,640.00
Cost of Units Completed and transferred out	$       660,000.00
Total costs accounted for	$       708,640.00

Working

Statement of Equivalent Units(Weighted average)
		Material	Labor	Overhead
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	26,400	100%	26,400.0	100%	26,400.0	100%	26,400
Ending WIP	3,200	70%	2,240.0	50%	1,600.0	50%	1,600
Total	29,600		28,640	Total	28,000.0	Total	28,000

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP	Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$                 13.50	2,240	$       30,240.00	26,400	$ 356,400
Labor	$                    4.70	1,600	$         7,520.00	26,400	$ 124,080
Overhead	$                    6.80	1,600	$       10,880.00	26,400	$ 179,520
		TOTAL	$ 48,640	TOTAL	$ 660,000