Question

The Polishing Department of Major Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process. Production: Beginning inventory 1,560 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 41,700; ending inventory of 6,600 units 10% complete as to conversion costs. Manufacturing costs: Beginning inventory costs, comprised of $20,400 of materials and $12,418 of conversion costs; materials costs added in Polishing during the month, $191,574; labor and overhead applied in Polishing during the month, $126,400 and $258,640, respectively. Compute the equivalent units of production for materials and conversion costs for the month of September. Materials Conversion Costs The equivalent units of production

Answer 1

a) Equivalent unit

	Material	Conversion
Unit transferred out	36660	36660
Ending WIP	6600	6600*10% = 660
Equivalent unit	43260	37320

b) Unit Cost

	Material	Conversion
total Cost	211974	397458
Equivalent unit	43260	37320
Unit cost	4.9	10.65

c) Transferred out = (10.65+4.9)*36660 = 570063

Ending WIP = (6600*4.9+660*10.65) = 39369