Question

Kimmel, Accounting, 6e Hele I S Exercise 16-6 The Cutting Department of Cassel Company has the following production and cost data for July. Production Costs 1. Transferred out 13,000 units. Started 4,300 units that are 60% complete as to conversion costs and 100% complete as to materials at July 31. Beginning work in process Materials Labor Manufacturing overhead $0 70,411 17,517 21,900 2. Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process Determine the equivalent units of production for (1) materials and (2) conversion costs. Materials Conversion Costs Total equivalent units of production LINK TO TEXTLINK TO TEXT VIDEO: SIMILAR EXERCISE VIDEO, APPLIED SKILLS Compute unit costs. (Round unit costs to 2 decimal places, e.g. 2.25.) Materials Conversion costs So F5 3 4 5 9

Answer 1

Solution:

Statement for Equivalent units of production

	Materials	Conversion
Transferred out	13,000	13,000
Ending work in process	4,300 (4,300*100%)	2,580 (4,300*60%)
Equivalent units	17,300	15,580

.

Unit costs For Materials = Cost incurred / Equivalent units

= $70,411/17,300

= $4.07

Unit costs For Conversion = Cost incurred / Equivalent units

= $17,517+$21,900 / 15,580

= $39,417 / 15,580

= $2.53

	Materials	Conversion
Unit cost	$4.07	$2.53

.

Total cost incurred = $70,411 + $39,417

= $109,828

.

Cost reconciliation schedule:

Details	Amount($)
Costs accounted for
Transferred out ($4.07+$2.53)*13,000	$85,800
Work in process, july 31
Materials ($4.07*4,300)	$17,501
Conversion ($2.53*2,580)	$6,527
Total costs	$109,828