Question

McCallum Tool Company has two departments, assembly and finishing. The assembly department takes purchased parts and assembles the final product. The finishing department performs testing and adds other materials and packages the product. Direct materials are added at the end of the process in the finishing department. The following summarizes the finishing department’s operations for the month of July.

	Number of Units
Work-in-process, July 1, 50% complete for conversion costs		4,000
Transferred in during July		28,000
Completed during July		27,000
Work-in-process, July 31, 50% complete for conversion costs		5,000

	Costs
Work-in-process, July 1 (transferred-in costs, $50,000; conversion costs, $30,125)	$	80,125
Transferred in from assembly department during July		150,000
Direct materials added during July		60,750
Conversion added during July		110,000
Total to account for $400,875 1. Equivalent units of transferred-in, direct materials, and conversion. 2. Equivalent unit costs for transferred-in costs, direct materials, and conversion. (Round your answers to 2 decimal places.) 3. Cost of goods completed and transferred out during July. 4. Cost of Work-in-Process Inventory at July 31. 1. Equivalent units: Transferred-in Direct materials Conversion 2. Unit costs Transferred-in Direct materials Conversion 3. Cost of goods completed and transferred out 4. Cost of ending work in process inventory

Answer 1

Answer

• Requirement 1

Statement of Equivalent Units
		Cost Transferred In		Material		Conversion Cost
	Units	Complete %	Equivalent units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	27,000	100%	27,000.0	100%	27,000.0	100%	27,000.0
Closing WIP	5,000	100%	5,000.0	0%	-	50%	2,500.0
		Total	32,000 [Answer]	Total	27,000 [Answer]	Total	29,500 [Answer]

• [2]

Cost per Equivalent Units
COST	Cost Transferred	Material	Conversion Cost	TOTAL
Beginning WIP Inventory Cost	$             50,000.00	$                          -	$              30,125.00	$            80,125.00
Cost incurred during period	$          150,000.00	$          60,750.00	$            110,000.00	$          320,750.00
Total Cost to be accounted for	$          200,000.00	$          60,750.00	$            140,125.00	$          400,875.00
Total Equivalent Units	32,000	27,000	29,500
Cost per Equivalent Units = Answers	$                   6.2500	$                2.2500	$                    4.7500	$                13.2500

• [3]

Cost of Goods completed and transferred out = $ 357,750

• [4]
  Cost of ending WIp = $ 43,125
• Working for [3] and [4]

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Cost Transferred	$                       6.25	5,000	$              31,250.00	27,000	$          168,750.00
Material	$                       2.25	-	$                             -	27,000	$            60,750.00
Conversion Cost	$                       4.75	2,500	$              11,875.00	27,000	$          128,250.00
TOTAL	$          400,875.00	TOTAL	$              43,125.00	TOTAL	$          357,750.00