Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,400 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $644,464 in total. The ending work in process inventory in January consisted of 3,200 units, which were 40% complete with respect to materials and 20% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows:

	Materials			Labor			Overhead
Cost per equivalent unit	$	14.20		$	3.70		$	6.50

Required:

1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.

2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.

3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.

4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Answer 1

1) Materials Labor Overhead 640 Equivalent unit of production 1,280 640 Working Notes Materials Labor Overhead Whole Units % Completed Equivalent Units (A) (B) (AⓇB) 3,200 40% 1,280 3,200 20% 640 3,200 20% 640 2) Materials Labor $ 18,176 $ Cost of ending work in process inventory Overhead 2,368 $ Total 4,160 $ 24,704 Working Notes Materials Labor Overhead Equivalent units Cost per unit Cost (A) (B) 1,280$ 14.20 $ 640$ 3.70$ 640$ 6.50 $ (A x B) 18,176 2,368 4,160

3) Materials Labor $ 360,680 $ Cost of units completed & transferred out Overhead Total 93,980 $ 165,100 $ 619,760 Working Notes Materials Labor Overhead Units transferred Cost per unit Cost (A) (B) 25,400 $ 14.20 $ 25,400 $ 3.70 $ 25,400 $ 6.50 $ (A x B) 360,680 93,980 165,100 $ 644,464 4) Cost Reconciliation Total cost to be accounted for Cost accounted for as follows: Cost of units completed & transferred out Cost of ending work in process inventory Total cost accounted for $ 619,760 24,704 644,464 $

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