Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,700 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $695,304 in total. The ending work in process inventory in January consisted of 3,700 units, which were 40% complete with respect to materials and 20% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Cost per equivalent unit Materials $ 14.20 Labor $4.10 Overhead $ 7.60 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

	Superior Micro Products
	Production Cost Report (Extracts)
	For the month ended January
Answer No.		Actual Units	Equivalent Units
			Material	Labor	Overhead
	Units Completed and Transferred	25700	25700	25700	25700
	Units in ending inventory	3700	1480	740	740
1)	Equivalent units of production	29400	27180	26440	26440
		Material	Labor	Overhead	Total
Given	Cost per equivalent unit	14.20	4.10	7.60	25.90
		Total
2)	Units in ending inventory	29,674	(see below note)
3)	Units completed and transfer	665,630	(see below note)
		Material	Labor	Overhead	Total
	Cost Accounted for
	Units completed and transfer	364,940	105,370	195,320	665,630
	Units in ending inventory	21,016	3,034	5,624	29,674
	Total Cost Accounted for	385,956	108,404	200,944	695,304
4)	Cost reconciliation
	Total cost to be accounted for	695,304	(See above note)
	Cost Accounted for
	Units completed and transfer	665,630
	Units in ending inventory	29,674
	Total Cost Accounted for	695,304