Question

Comfort chair company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 73,700 chairs. During the month, the firm completed 78,500 chairs, and transferred them to the Finishing Department. The firm ended the month with 11,200 chairs in ending inventory. There were 16,000 chairs in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The Weighted-average method of process costing is used by Comfort. Ending working in process was 100% complete as to direct materials and 60% complete as to conversion costs.

Beginning inventory:

Direct materials $24,800

Conversion costs $35,900

Manufacturing costs added during the accounting period:

Direct materials $168,200

Conversion costs $278,400

1. Compute equivalent units for direct materials and conversion costs.

2. Calculates cost per equivalent unit of work done to date.

3. Assign costs to units completed and to units in ending work-in-process inventory.

Answer 1

Requirement 1

	Material	Conversion
Equivalent Units of Production	89,700	85,220

Requirement 2

	Material	Conversion
Cost per equivalent Unit	$ 2.15	$    3.69

Requirement 3

	Material	Conversion	Total
Units Completed	$             1,68,902	$         2,89,516	$           4,58,418
Ending Inventory	$                 24,098	$             24,784	$               48,882

Reconciliation of Units
A	Opening WIP	16,000
B	Introduced	73,700
C=A+B	TOTAL	89,700
D	Transferred	78,500
E=C-D	Closing WIP	11,200

Statement of Equivalent Units
		Material		Conversion Cost
	Units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	78,500	100%	78,500	100%	78,500
Closing WIP	11,200	100%	11,200	60%	6,720
Total	89,700	Total	89,700	Total	85,220

Cost per Equivalent Units
COST		Material	Conversion Cost	TOTAL
Beginning WIP Inventory Cost		$             24,800	$               35,900	$                  60,700
Cost incurred during period		$         1,68,200	$           2,78,400	$               4,46,600
Total Cost to be accounted for		$         1,93,000	$           3,14,300	$               5,07,300
Total Equivalent Units		89,700	85,220
Cost per Equivalent Units		$                 2.15	$                    3.69

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$                     2.15	11,200	$         24,098.10	78,500	$       1,68,901.90
Conversion Cost	$                     3.69	6,720	$         24,784.04	78,500	$       2,89,515.96
TOTAL	$             5,07,300	TOTAL	$               48,882	TOTAL	$             4,58,418