Question

Cost of Units Transferred Out and Ending Work in Process The costs per equivalent unit of direct materials and conversion in the Rolling Department of Kraus Steel Company are $1.45 and $0.95, respectively. The equivalent units to be assigned costs are as follows: Equivalent Units Direct Materials Conversion 0 Inventory in process, October 1 Started and completed during October Transferred out of Rolling (completed) Inventory in process, October 31 5,600 70,000 70,000 70,000 6,000 75,600 2,400 78,000 Total units to be assigned costs 76,000 The beginning work in process inventory on October 1 had a cost of $3,580. Determine the cost of completed and transferred-out production, the ending work in process inventory, and the total costs assigned by the Rolling Department. Completed and transferred-out production Inventory in process, October 31 DIO Total costs assigned by the Rolling Department

Answer 1

1.

Cost of beginning WIP	$3,580
Conversion cost (5,600×$0.95)	$5,320
Total cost of beginning WIP	$8,900
Started and completed during the period
Direct materials (70,000×$1.45)	$101,500
Conversion (70,000×$0.95)	$66,500
Total cost of started and completed	$168,000
Total cost of units completed and transferred out	$176,900

Cost of Inventory in process, Oct 31

Materials (6,000×$1.45) =$8,700

Conversion (2,400×$0.95) =$2,280

Total cost of Inventory in process, Oct 31 =$10,980

Total cost assigned by the rolling department:

Cost of units completed and transferred out =$176,900

Inventory in process, Oct 31 =$10,980

Total cost assigned by the rolling department =$187,880

2.

Energy cost per ton, September ($7,020/780) =$9

Energy cost per ton, October ($10,080/1,680) =$6

The cost of energy has appeared to decrease by $3 per ton between September and October.