Question

The Cutting Department of Cassel Company has the following production and cost data for July. 1. 2. Production Transferred out 13,500 units. Started 4, 100 units that are 60% complete as to conversion costs and 100% complete as to materials at July 31. Costs Beginning work in process Materials Labor Manufacturing overhead $0 66,880 16,304 22,000 Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process.

Answer 1

Solution:

Cassel Company
Cutting department
Computation of Equivalent unit of Production
Particulars	Physical Units	Material	Conversion
Units to account for:
Beginning WIP	0
Started into Production	17600
Total units to account for	17600
Units accounted for:
Unit completed & Transferred out	13500	13500	13500
Units in ending inventory:	4100
Material (100%)		4100
Conversion (60%)			2460
Equivalent units of production	17600	17600	15960

Cassel Company Computation of Cost per equivalent unit - Cutting department
Particulars	Material	Conversion	Total
Opening WIP	$0	$0	$0
Cost Added during Period	$66,880	$38,304	$105,184
Total cost to be accounted for	$66,880	$38,304	$105,184
Equivalent units of production	17600	15960
Cost per Equivalent unit	$3.80	$2.40

Cassel Company Computation of Cost of ending WIP and units completed & transferred out - Cutting Department
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	4100	2460
Cost per equivalent unit	$3.80	$2.40
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$15,580	$5,904	$21,484
Units completed and transferred	13500	13500
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$51,300	$32,400	$83,700

Cost reconciliation - Cutting Department
Particulars	Amount
Costs to be accounted for:
Cost of beginning WIP inventory	$0.00
Cost added to production	$105,184.00
Total Costs to be accounted for	$105,184.00
Costs accounted for as follows:
Cost of unit transferred out	$83,700
Ending WIP:
Material	$15,580
Converison	$5,904
Total Ending WIP	$21,484
Total costs accounted for	$105,184