Analysis of Work-in-Process Inventory Account
A-1 Products manufactures wooden furniture using an assembly-line process. All direct materials are introduced at the start of the process, and conversion cost is incurred evenly throughout manufacturing. An examination of the company's Work-in-Process Inventory account for June revealed the following selected information:
Debit side:
June 1balance: 300 units, 30% complete as to conversion, cost $21 ,300*
Production started: 900 units
Direct material used during June: $45,000
June conversion cost: $25,700
Credit side:
Production completed: 700units
*Supplementary record revealed direct-material cost of $15.000andconversion cost of $6.300.
Conversations with manufacturing personnel revealed that the ending work in process was 60 percent complete as to conversion.
Required:
1. Determine the number of units in the June 30 work-in-process inventory.
2. Calculate the cost of goods completed during June and prepare the appropriate journal entry to record completed production.
3. Determine the cost of the June 30 work-in-process inventory.
4. Briefly explain the meaning of equivalent units. Why are equivalent units needed to properly allocate costs between completed production and production in process?
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