Question

3.9 (LO 3, 4), AP Baden Company has gathered the following information. -O 36,000 6,000 Units in beginning work in process Units started into production Units in ending work in process Percent complete in ending work in process: Conversion costs Materials Costs incurred: Direct materials Direct labor Overhead 40% 100% $72,000 $61,000 $101,000

Answer 1

(a) Equivalent units of production for:

Materials: 36,000

Conversion costs: 32,400

	Equivalent Units
	Direct Materials	Conversion Costs
Units in Begning Work in Process	0	0
Add: Units started in Production	36000	36000
Less : Units in ending work in process	(6000)	(6000)
Units completed and transferred out	30000	30000
Add: Equivalent Units in ending work in process	6000 (100 % Complete (6000 x100%)	2400 (40 % Complete (6000 x40%)
Total Units accounted for	36000	32400

(b) Unit costs of production

	Direct Materials	Conversion Costs (Labor + Overhead)	Total
Beginning work in process	0	0	0
Costs added during the month	72000	162000 (61000 + 101,000)	234000
Total costs to be accounted for	72000	162000	234000

	Direct Materials	Conversion Costs	Total
Total costs to be accounted for	72000	162000	234000
Total equivalent units accounted for	36000	32400
Unit Costs of production	2.00	5.00	7.00
	(72000 / 36000)	(162000 / 32400)

c) Assignment of cost to units transferred out and in process

	Total
Costs assigned to units transferred out	210000
(30000 units x $7)
Costs assigned to ending work in process (6000 units x $2) + (2400 units x $5) (Units calculated in Above parts)	24000