Question

The Polishing Department of Major Company has the following production and manufacturing cost data for September Materials are entered at the beginning of the process Production: Beginning inventory 1,600 units that are 100% complete as to materials and 30% complete as to conversion costs. units started during the period ar 42,900; ending inventory of 5,000 units 10% complete as to conversion costs Manufacturing costs: Beginning inventory costs, comprised of $20,000 of materials and $43,180 of conversion costs, material costs added in Polishing during the month, $175,800; labor and overhead applied in Polishing during the month, $125,680 and $257,140, respectively Instructions (a) Compute the equivalent units of production for materials and conversion costs for the month of September (b) Compute the unit costs for materials and conversion costs for the montlh (c) Determine the costs to be assigned o the units transferred out and in process NOTE: Enter a number in cells requesting a value enter either a number or a formula in cells with a"?".

Answer 1

Answer

• All working forms part of the answer
• Requirement ‘a’

Units Reconciliation
Units to account for:	Physical Units
WIP Sept 1	1,600
Units started into production	42,900
Total Units to account for	44,500
Total Units accounted for:
Transferred out	39,500
Ending WIP Sept 30	5,000
Total Units accounted for	44,500

EUP - Weighted Average Method	% Material	Materials	% Conversion	Conversion
Units TRANSFERRED	100%	39,500	100%	39,500
Units of ENDING WIP	100%	5,000	10%	500
Equivalent Units of Production		44,500		40,000

• Requirement ‘b’

	Material	Conversion	TOTAL
WIP Sept 1	$          20,000.00	$                                  43,180.00	$                                  63180
Cost incurred during the period	$        175,800.00	$                                382,820.00	$                                558620
Total Costs	$        195,800.00	$                                426,000.00	$                                621800

• Requirement ‘c'
  Working

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	39,500	$                      4.40	$        173,800.00
- Conversion	39,500	$                    10.65	$        420,675.00
Total Cost transferred Out				$            594,475.00
Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	5,000	$                      4.40	$          22,000.00
- Conversion	500	$                    10.65	$             5,325.00
Total cost of ending WIP				$              27,325.00
Total costs accounted for				$                                621,800.00

Transferred out = $ 594,475
WIP Sept 30:
Material = $22000
Conversion Costs = $ 5325
Total WIp [22000 + 5325] =$27,325

Total cost = 594475 + 27325 = $ 621,800