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 1,580 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 41,200; ending inventory of 6,600 units 10% complete as to conversion costs. Manufacturing costs: Beginning inventory costs, comprised of $20,600 of materials and $14,674 of conversion costs; materials costs added in Polishing during the month, $186,883; labor and overhead applied in Polishing during the month, $127,600 and $257,440, 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 Compute the unit costs for materials and conversion costs for the month. (Round unit costs to 2 decimal places, e.g. 2.25.) Materials Conversion Costs Unit costs $ $

Answer 1

Solution

	Material	Conversion
Equivalent Units of Production	42,780	36,840

.

	Material	Conversion
Cost per equivalent Unit	$ 4.85	$ 10.85

.

Transferred out	$                         568,026
Work in process	$                           39,171

Working

Reconciliation of Units
A	Beginning WIP	1,580
B	Introduced	41,200
C=A+B	TOTAL	42,780
D	Transferred out	36,180
E=C-D	Ending WIP	6,600

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	36,180			100%	36,180	100%	36,180
Ending WIP	6,600			100%	6,600	10%	660
Total	42,780			Total	42,780	Total	36,840

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion	TOTAL
Beginning WIP Inventory Cost (A)		$ 20,600	$ 14,674	$ 35,274
Cost incurred during period (B)		$ 186,883	$ 385,040	$ 571,923
Total Cost to be accounted for (C=A+B)		$ 207,483	$ 399,714	$ 607,197
Total Equivalent Units(D)		42,780	36,840
Cost per Equivalent Units (E=C/D)		$ 4.85	$ 10.85	$ 15.70

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 4.85	6,600	$          32,010.00	36,180	$        175,473.00
Conversion	$ 10.85	660	$             7,161.00	36,180	$        392,553.00
TOTAL	$ 607,197	TOTAL	$ 39,171	TOTAL	$ 568,026