Question

The Assembly Department of Best Motors began September with no work in process inventory. During the month, production that cost $64,434 (direct materials, $12,954, and conversion costs, $51,480) was started on 31,000 units. Best completed and transferred to the Testing Department a total of 23,000 units. The ending work in process inventory was 30% complete as to direct materials and 70% complete as to conversion work. Read the requirements.

Answer 1

Equivalent Unit Computation
			Physical	Direct	Conversion
			Units	Material	cost
Completed and transferred out	23000	23000	23000
Ending Work in process	8000	2400	5600
Total Physical Units accounted for	31000
Total Equivalent units		25400	28600
TOTAL COST TO ACCOUNT FOR:
				Material		Conversion
Cost of Beginning WIP		0		0
Cost added during Sep		12,954		51,480
Total Cost to account for:		12,954		51,480
Equivalent Units			25,400		28,600
Cost per Equivalent unit		0.51		1.8
Units completed and transferred out (23000 units)
				Material	Conversion	Total
Equivalent units			23,000	23000
Multiply: Cost per EUP		0.51	1.8
Cost of units completed and transferred out	11730	41400	53130
Ending WIP (8000 units)
				Material	Conversion	Total
Equivalent units			2,400	5600
Multiply: Cost per EUP		0.51	1.8
Cost of Ending WIP			1224	10080	11304
Journal entry
S.no.	Accounts title and explanation		Debit $	Credit $
a.	Work in process-Testing inventory	53,130
	Work in process-Assembly Inventory		53,130
	(for goods completed and transferred)
WORK IN PROCESS INVENTORY
				Debit $	Credit $
Direct material			12,954
Conversion cost			51,480
Work in process-Testing			53,130
Ending inventory			11,304