Question

In March, Kelly Company had the following unit production costs: materials $10 and conversion costs $9. On March 1, it had no work in process. During March, Kelly transferred out 23,000 units. As of March 31, 4,500 units that were 33% complete as to conversion costs and 100% complete as to materials were in ending work in process.

Compute the total units to be accounted for.

Total units

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Compute the equivalent units of production.

		Materials		Conversion costs
The equivalent units of production

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Prepare a cost reconciliation schedule, including the costs of materials transferred out and the costs of materials in process.

Cost Reconciliation Schedule
Costs accounted for
Transferred out			$
Work in process, March 31
Materials	$
Conversion costs
Total costs			$

Answer 1

1) Total units to be accounted for =

23000+4500=27500 units

2) Equivalent unit of production

Total material equivalent units = finished units +100% work in process units

= 23000+4500=27500 units

Total conversion equivalent units = finished units +33% work in process units

= 23000+33%*4500

= 23000+1485 =24485 units

3) Cost reconcilliation schedule

• Cost accounted for transferred out = units*total cost of material and conversion

= 23000 units *19

=$4,37,000

• Work in process , march 31

material =4500*10 = $45000

conversion cost = 1485*9 = $13365

Cost Reconcilliation schedule

cost accounted for transferred out =$437000

+ work in process , march 31 =$58365

material $45000

conversion $13365

TOTAL COST = $495365

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