Question

"I think we goofed when we hired that new assistant controller," said Ruth Scarpino, president of Provost Industries. "Just look at this report that he preparedfor last month for the Finishing Department. I can't make heads or tails out of it."


Finishing Department costs:
Work in process inventory, April 1, 400 units; materials
100% complete; conversion 60% complete $9,410*
Costs transferred in during the month from the
preceding department, 2,100 units 18,400
Materials cost added during the month 5,950
Conversion costs incurred during the month 10,940
Total departmental costs

$44,700
Finishing Department costs assigned to:
Units completed and transferred to finished goods,
2,000 units at $22.35 per unit $44,700
Work in process inventory, April 30, 500 units; materials
0% complete; conversion 40% complete 0
Total departmental costs assigned

$44,700
*Consists of cost transferred in, $5,100; materials cost, $2,050; and conversion cost, $2,260.
"He's struggling to learn our system," replied Frank Harrop, the operations manager. "The problem is that he's been away from process costing for a long time, andit's coming back slowly."
"It's not just the format of his report that I'm concerned about. Look at that $22.35 unit cost that he's come up with for April. Doesn't that seem high to you?"said Ms. Scarpino.
"Yes, it does seem high; but on the other hand, I know we had an increase in materials prices during April, and that may be the explanation," replied Mr. Harrop."I'll get someone else to redo this report and then we may be able to see what's going on."
Provost Industries manufactures a ceramic product that goes through two processing departments—Molding and Finishing. The company uses the weighted-average methodin its process costing.

Required:
(a)	Calculate the cost per equivalent unit. (Round your answer to 2 decimal places. Omit the "$" sign in yourresponse.)

	Transferred in costs	Materials	Conversion
Cost per equivalent unit	$	$	$

(b)	How much cost should have been assigned to the units completed and transferred to finished goods? (Omit the "$" sign in yourresponse.)

	Transferred in costs	Materials	Conversion	Total
Cost of units completed and transferred out	$	$	$	$

(c)	How much cost should have been assigned to the ending work in process inventory? (Leave no cells blank - be certain to enter"0" wherever required. Omit the "$" sign in your response.)

	Transferred in costs	Materials	Conversion	Total
Cost of ending work in process inventory	$	$	$	$

Answer 1

(a).Cost per equivalent unit:Works in process beginning units= 400 unitsUnits started during the period = 2,100Units completed and transferred out = 2,000
Units in ending works in process (2,500 - 2,000) = 500 units.

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(b).Cost of finished goods inventory:

Cost of finished goods
Particulars	Material	Conversion	Total
Completed units (a)	2000	2000
Cost per equivalent unit (b)	$13.91	$5.27
Cost of finished goods(a)x(b)	$27,820	$10,540	$38,360

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(c).Cost of ending inventory:

Cost of ending works in process
Particulars	Material	Conversion	Total
Ending works in process:
Equivalent units of production (a) (material; 500 unitsx0%complete;conversion: 500x40%complete)	0	200
Cost per equivalent unit (b)	$13.91	$5.27
Cost of ending works in process (a) x(b)	0	$1,054.00	$1,054.00

Answer 2

The cost per unit $25.71 is 100% wrong .Because here the total cost($46278) includes with
preceding dept, 1,950 units......................................................... 17,940 ,
Materials cost added during the month............................................. 6,210
here we shold segergate ,what amount has to be accounted = $17940
and whamount actually accounted that is material = $6210 ,
conversion =$13920 (Please look into the above table ) it has segrageted .
And the correct per unit cost here = 22175 / 2400 = 9.24
Cost per equillent unit :
material = $3.4,
converison = $7
Note : here the conversion cost is taken only 35 % for Ending Wip ,the reamin 65 % will be
shown at 65% in next process as opeing WIP.