Question

Cost of Units Transferred Out and Ending Work in Process

The costs per equivalent unit of direct materials and conversion in the Rolling Department of Oak Ridge Steel Company are $180 and $62, respectively. The equivalent units to be assigned costs are as follows:

	Equivalent Units
	Direct Materials		Conversion
Inventory in process, July 1	0		225
Started and completed during July	1,900		1,900
Transferred out of Rolling (completed)	1,900		2,125
Inventory in process, July 31	500		200
Total units to be assigned costs	2,400		2,325

The beginning work in process inventory on July 1 had a cost of $80,000. Determine the cost of completed and transferred-out production, the ending work in process inventory, and the total costs assigned by the Rolling Department.

Completed and transferred-out production	$
Inventory in process, ending	$
Total costs assigned by the Rolling Department	$

10. EX.17-05.ALGO

Equivalent Units of Production

The Converting Department of Hopkinsville Company had 720 units in work in process at the beginning of the period, which were 70% complete. During the period, 15,200 units were completed and transferred to the Packing Department. There were 800 units in process at the end of the period, which were 70% complete. Direct materials are placed into the process at the beginning of production.

Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".

Hopkinsville Company
Number of Equivalent Units of Production
	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
Inventory in process, beginning
Started and completed
Transferred to Packing Department
Inventory in process, ending
Total

Answer 1

Solution 1:

Cost of completed and transferred-out production = $80000 + (1900*$180) + (2125*$62) = $553,750

Cost of Inventory in process, ending = (500*$180) + (200*$62) = $102,400

Total costs assigned by the Rolling Department = $553,750 + $102,400 = $656,150

Solution 2:

Computation of Equivalent Units of Production (FIFO method)
	Whole Units	Equivalent units Direct Materials	Equivalent units Conversion
Inventory in process, Beginning (0% Material, 30% conversion)	720	0	216
Started and completed (15200-720)	14480	14480	14480
Transferred To Packaging Department	15200	14480	14696
Inventory in process, Ending (100% Material, 70% Conversion)	800	800	560
Total equivalent units	16000	15280	15256