Question

Superior Micro Products uses the weighted average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,500 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $707,415 in total. The ending work in process inventory in January consisted of 3,700 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: Cost per equivalent unit Materials $ 13.50 Labor $ 4.70 Overhead $ 7.30 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

Equivalent Units:
			UNITS	Material Cost	Labour	Overheads
				% Completion	Units	% Completion	Units	% Completion	Units
Units completed and transferred out	25500	100%	25,500	100%	25,500	100%	25,500
Ending Work in Process	3700	70%	2,590	50%	1,850	50%	1,850
Total Equivalent units	29200		28,090		27,350		27,350
Ending Work in process (3700 units)
				Equivalent unit	Cost per EU	Total Cost
Material				2,590	13.5	34965
Labour				1850	4.7	8695
Overheads			1,850	7.3	13505
Total cost of Ending Work in process:			57,165
Cost of Units transferred out (25500 units)
				Equivalent unit	Cost per EU	Total Cost
Material				25,500	13.5	344250
Labour				25500	4.7	119850
Overheads			25,500	7.3	186150
Total cost of Ending Work in process:			6,50,250
Final Answer:
Req 1.			Material	Labour	Overheads
Equivalent units		28,090	27,350	27,350
Req 2.
			Material	Labour	Overheads	Total
Ending WIP inventory	34,965	8,695	13,505	57,165
Req 3.
			Material	Labour	Overheads	Total
Cost of Units completed and transferred	3,44,250	1,19,850	1,86,150	6,50,250
Req 4.
Cost to account for				7,07,415
Cost accounted for:
Cost of units completed and transferred out	57,165
Cost of Ending WIP inventory		6,50,250
Total cost accounted for			7,07,415