BE 147
Tip Top Painting Company has the following production data for January: Beginning work in process, 0 units
Units transferred out, 35,000
Units in ending work in process, 6,000, which are 30% complete for conversion costs Materials are added only at the beginning of the process.
Instructions
Compute equivalent units of production for both materials and conversion costs.
Ans: N/A, SO: 5, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 147 (4 min.)
Equivalent Units QUANTITIES Physical Units Materials Conversion Costs
Units to be accounted for
Work in process, January 1 0 Started into production 41,000
Total units 41,000
Units accounted for
Transferred out 35,000 35,000 35,000
Work in process, January 31 6,000 6,000 1,800 (6,000 × 30%)
Total units 41,000 41,000 36,800
BE 148
Lowman Painting Company has the following production data for March: Beginning work in process, 2,000 units
Units transferred out, 42,000
Units in ending work in process, 8,000, which are 80% complete for conversion costs Materials are added only at the beginning of the process.
Instructions
Compute equivalent units of production for both materials and conversion costs.
Ans: N/A, SO: 5, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 148 (4 min.)
Equivalent Units QUANTITIES Physical Units Materials Conversion Costs Units to be accounted for
Work in process, March 1 2,000 Started into production 48,000
BE 148 (Cont.) Units accounted for
Transferred out 42,000 42,000 42,000
Work in process, March 31 8,000 8,000 6,400 (8,000 × 80%)
Total units 50,000 50,000 48,400
BE 149
The Kirkland Department of Delta Manufacturing began the month of December with beginning work in process of 4,000 units that are 100% complete as to materials and 30% complete as to conversion costs. Units transferred out are 10,000 units. Ending work in process contains 3,000 units that are 100% complete as to materials and 60% complete as to conversion costs.
Instructions
Compute the equivalent units of production for materials and conversion costs for the month of December.
Ans: N/A, SO: 5, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 149 (4 min.)
Equivalent Units QUANTITIES Physical Units Materials Conversion Costs Units to be accounted for
Work in process, December 1 4,000 Started into production 9,000
Total units 13,000
Units accounted for
Transferred out 10,000 10,000 10,000
Work in process, December 31 3,000 3,000 1,800 (3,000 × 60%)
Total units 13,000 13,000 11,800
BE 150
White Supplies’ total material costs are $50,000 and total conversion costs are $65,000. Equivalent units of production for materials are 10,000, and 5,000 for conversion costs.
Instructions
Compute the unit costs for materials, conversion costs, and total manufacturing costs for the month.
Ans: N/A, SO: 6, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 150 (3 min.) COSTS
Unit costs Materials Conversion Costs Total
Costs incurred $50,000 $65,000 $115,000
Equivalent units 10,000 5,000
BE 151
Apoly Manufacturing Company has the following production data for January.
Ending Work in Process Beginning
Work in Process
Units Started into
Production Units
% Complete as to Conversion Cost
-0- 8,500 700 30%
Instructions
Compute the physical units for January.
Ans: N/A, SO: 6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 151 (4 min.)
Beginning work in process -0- Started into production 8,500 Total units to be accounted for 8,500
Transferred out 7,800
Ending work in process 700 Total units accounted for 8,500
BE 152
Sandusky Widget Company has the following production data for March.
Ending Work in Process
Month
Beginning Work in Process
Units
Transferred Out Units
% Complete as to Conversion Cost
March 1,200 7,100 800 20%
Instructions
Compute the physical units for March.
Ans: N/A, SO: 6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 152 (4 min.)
Beginning work in process 1,200 Started into production 6,700 Total units to be accounted for 7,900
Transferred out 7,100
Ending work in process 800 Total units accounted for 7,900
BE 153
Sequal Company has the following production data for June: units transferred out 50,000, and ending work in process 6,000 units that are 100% complete for materials and 30% complete for conversion costs. Unit materials cost is $5 and unit conversion cost is $11.
Instructions
Determine the costs to be assigned to the units transferred out and the units in ending work in process.
Ans: N/A, SO: 6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 153 (4 min.) Work in process, June 30
Materials (6,000 × $5) $30,000
Conversion costs (6,000 × 30% × $11) 19,800 Total cost of work in process $ 49,800
Units transferred out (50,000 × $16) $800,000
BE 154
Tomlinson Company has the following production data for May: Beginning work in process, 0 units
Units started, 62,000
Ending work in process, 7,000 units that are 100% complete for materials and 60% complete for conversion costs
Unit materials cost, $5 Unit conversion cost, $10
Instructions
Determine the costs to be assigned to the units transferred out and the units in ending work in process.
Ans: N/A, SO: 6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 154 (4 min.) Work in process, May 31
Materials (7,000 × $5) $35,000
Conversion costs (7,000 × 60% × $10) 42,000 Total cost of work in process $77,000
BE 155
Dirt Cleaners, Inc. has the following production data for January: Transferred out 50,000 units
Ending work in process 6,000 units
The units in ending work in process are 100% complete for materials and 60% complete for conversion costs. There is no beginning work in process. Materials cost is $8 per unit and conversion costs are $11 per unit.
Instructions
Determine the costs to be assigned to the units transferred out and the units in ending work in process.
Ans: N/A, SO: 6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 155 (4 min.) Cost Reconciliation Schedule Costs accounted for
Transferred out (50,000 × $19) $ 950,000 Work in process, June 30
Materials (6,000 × $8) $ 48,000
Conversion costs (3,600* × $11) 39,600 87,600
Total costs $1,037,600
*(6,000 x 60%)
BE 156
Production costs chargeable to the Sanding Department in July for Joyful Art are $12,500 for materials, $26,000 for labor, and $10,000 for manufacturing overhead. Equivalent units of production are 25,000 for materials and 20,000 for conversion costs.
Instructions
Compute the unit costs for materials and conversion costs.
Ans: N/A, SO: 6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 156 (4 min.) COSTS
Unit costs Materials Conversion Costs Total
Costs in July $12,500 $36,000 $48,500
Equivalent units 25,000 20,000
Unit costs $0.50 $1.80 $ 2.30
aBE 157
Tip Top Painting Company has the following production data for March:
Beginning work in process, 2,000 units, which are 30% complete for conversion costs Units transferred out, 42,000
Units in ending work in process, 6,000, which are 80% complete for conversion costs Materials are added only at the beginning of the process.
aBE 157 (Cont.)
Instructions
Compute equivalent units of production for both materials and conversion costs using the FIFO method.
Ans: N/A, SO: 8, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 157 (5 min.)
Equivalent Units QUANTITIES Physical Units Materials Conversion Costs Units to be accounted for
Work in process, March 1 2,000 Started into production 46,000
Total Units 48,000
Units accounted for
Work in process, March 1 2,000 0 1,400 (2,000 × 70%) Transferred out 40,000 40,000 40,000
Work in process, March 31 6,000 6,000 4,800 (6,000 × 80%)
Total units 48,000 46,000 46,200
aBE 158
The Kirkland Department of Delta Manufacturing began the month of December with beginning work in process of 4,000 units that are 100% complete as to materials and 20% complete as to conversion costs. Units transferred out are 10,000 units. Ending work in process contains 1,000 units that are 100% complete as to materials and 60% complete as to conversion costs.
Instructions
Compute equivalent units of production for both materials and conversion costs for the month of December using the FIFO method.
Ans: N/A, SO: 8, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
aSolution 158 (5 min.)
Equivalent Units QUANTITIES Physical Units Materials Conversion Costs Units to be accounted for
Work in process, December 1 4,000 Started into production 7,000
Total Units 11,000
Units accounted for
Work in process, December 1 4,000 0 3,200 (4,000 × 80%)
Transferred out 6,000 6,000 6,000
Work in process, December 31 1,000 1,000 600 (1,000 × 60%)
EXERCISES
Ex. 159
Lutz Manufacturing Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system.
(a) Purchased raw materials for $50,000 on account.
(b) Raw materials requisitioned for production were: Direct materials
Mixing department $20,000
Finishing department 14,000
(c) Incurred labor costs of $64,000.
(d) Factory labor used:
Mixing department $39,000
Finishing department 25,000
(e) Manufacturing overhead is applied to the product based on machine hours used in each department:
Mixing department—400 machine hours at $30 per machine hour. Finishing department—500 machine hours at $20 per machine hour.
(f) Units costing $56,000 were completed in the Mixing Department and were transferred to the Finishing Department.
(g) Units costing $60,000 were completed in the Finishing Department and were transferred to finished goods.
(h) Finished goods costing $30,000 were sold on account for $45,000.
Instructions
Prepare the journal entries to record the preceding transactions for Lutz Manufacturing Company. Ans: N/A, SO: 4, Bloom: AP, Difficulty: Medium, Min: 20, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC:
Problem Solving, IMA: FSA
Solution 159 (20–28 min.)
(a) Raw Materials Inventory... 50,000
Accounts Payable... 50,000 (Purchase of raw materials on account)
(b) Work in Process—Mixing... 20,000 Work in Process—Finishing... 14,000
Raw Materials Inventory... 34,000 (To record materials used in production)
(c) Factory Labor... 64,000
Wages Payable... 64,000 (To record payroll liability)
Solution 159 (Cont.)
(d) Work in Process—Mixing... 39,000 Work in Process—Finishing... 25,000
Factory Labor... 64,000 (To assign factory labor to production)
(e) Work in Process—Mixing (400 × $30)... 12,000 Work in Process—Finishing (500 × $20)... 10,000
Manufacturing Overhead... 22,000 (To assign overhead to processes)
(f) Work in Process—Finishing... 56,000
Work in Process—Mixing... 56,000 (To record transfer of units to the Finishing Department)
(g) Finished Goods Inventory... 60,000
Work in Process—Finishing... 60,000 (To record transfer of units to finished goods)
(h) Accounts Receivable... 45,000
Sales... 45,000 (To record sale of finished goods on account)
Cost of Goods Sold... 30,000
Finished Goods Inventory... 30,000 (To record cost of goods sold)
Ex. 160
Sanders Company has two production departments: Fabricating and Finishing. Beginning inventories are: Work in Process—Fabricating, $6,030; Work in Process—Finishing, $4,100; and Finished Goods, $5,600. During the month the following transactions occurred:
1. Purchased $40,000 of raw materials on account. 2. Incurred $65,000 of factory labor. Wages are unpaid.
3. Incurred $35,000 of manufacturing overhead; $30,000 was paid and the remainder is unpaid. 4. Requisitioned materials for Fabricating, $10,000 and Finishing, $8,000.
5. Used factory labor for Finishing, $52,000 and Fabricating, $13,000.
6. Applied $30,000 of overhead based on machine hours used in each department. The Finishing Department used twice as many machine hours as did Fabricating.
Instructions
Journalize the transactions for the month.
Ans: N/A, SO: 4, Bloom: AP, Difficulty: Medium, Min: 12, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA
Solution 160 (12–16 min.)
1. Raw Materials Inventory... 40,000
Accounts Payable... 40,000 2. Factory Labor... 65,000 Wages Payable... 65,000 3. Manufacturing Overhead... 35,000 Accounts Payable... 5,000 Cash... 30,000 4. Work in Process—Fabricating... 10,000 Work in Process—Finishing... 8,000
Raw Materials Inventory... 18,000
5. Work in Process—Fabricating... 13,000 Work in Process—Finishing... 52,000 Factory Labor... 65,000 6. Work in Process—Fabricating... 10,000 Work in Process—Finishing... 20,000 Manufacturing Overhead... 30,000 Ex. 161
The Pasta Factory manufactures spaghetti sauce through two production departments: Cooking and Packaging. For the month of February, the work in process accounts show the following debits:
Cooking Packaging Beginning work in process $ -0- $ 6,000
Materials 40,000 21,000
Labor 16,000 9,000
Overhead 25,000 19,000
Costs transferred in 65,000
Instructions
Journalize the February transactions that involved the work in process accounts.
Ans: N/A, SO: 4, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA
Solution 161 (10–15 min.)
Work in Process—Cooking... 40,000 Work in Process—Packaging... 21,000
Raw Materials Inventory... 61,000 Work in Process—Cooking... 16,000 Work in Process—Packaging... 9,000 Factory Labor... 25,000 Work in Process—Cooking... 25,000 Work in Process—Packaging... 19,000 Manufacturing Overhead... 44,000
Solution 161 (Cont.)
Work in Process—Packaging... 65,000
Work in Process—Cooking... 65,000
Ex. 162
Benson Industries uses a process cost system. Products are processed first by Department A, second by Department B, and then they are transferred to the finished goods warehouse. Shown below is the cost information for Department B during the month of October:
Costs of units transferred in $120,000
Manufacturing costs added in Department B:
Direct materials $60,000
Direct labor 6,000
Manufacturing overhead 19,000 85,000
Total costs charged to Department B in October $205,000 The cost of work in process in Department B at October 1 is $25,000, and the cost of work in process at October 31 has been determined to be $30,000.
Instructions
Prepare journal entries to record for the month of October: (a) The transfer of production from Department A to B. (b) The manufacturing costs incurred by Department B.
(c) The transfer of completed units from Department B to the finished goods warehouse.
Ans: N/A, SO: 4, Bloom: AP, Difficulty: Medium, Min: 8, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA
Solution 162 (8–11 min.)
(a) Work in Process—Dept. B... 120,000
Work in Process—Dept. A... 120,000 (b) Work in Process—Dept. B... 85,000
Factory Labor... 6,000 Raw Materials Inventory... 60,000 Manufacturing Overhead... 19,000 (c) Finished Goods Inventory ($25,000 + $205,000 – $30,000)... 200,000
Work in Process—Dept. B... 200,000
Ex. 163
Hardy Company manufactures a single product by a continuous process, involving two production departments. The records indicate that $120,000 of direct materials were issued to and $200,000 of direct labor was incurred by Department 1 in the manufacture of the product. The factory overhead rate is $20 per machine hour; machine hours were 5,000 in Department 1. Work in process in the department at the beginning of the period totaled $35,000; and work in process at the end of the period was $25,000.
Ex. 163 (Cont.)
Instructions
Prepare entries to record
(a) The flow of costs into Department 1 for (1) direct materials
(2) direct labor (3) overhead
(b) The transfer of production costs to Department 2.
Ans: N/A, SO: 4, Bloom: AP, Difficulty: Medium, Min: 7, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA
Solution 163 (7–10 min.)
(a) (1) Work in Process—Dept. 1... 120,000
Raw Materials Inventory... 120,000
(2) Work in Process—Dept. 1... 200,000 Factory Labor... 200,000 (3) Work in Process—Dept. 1... 100,000 Manufacturing Overhead (5,000 × $20)... 100,000 (b) Work in Process—Dept. 2... 430,000* Work in Process—Dept. 1... 430,000 *$35,000 + $120,000 + $200,000 + $100,000 – $25,000 = $430,000 Ex. 164
Muffy Painting Company has the following production data for March.
Ending Work in Process Beginning Units % Complete as to Month Work in Process Transferred Out Units Conversion Cost
March 3,000 42,000 5,000 80%
Instructions
Compute equivalent units of production for March for both materials and conversion costs. Materials are entered at the beginning of the process.
Ans: N/A, SO: 5, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 164 (10 min.)
Equivalent Units Quantities Physical Units Materials Conversion Costs Units to be accounted for
Work in process, March 1 3,000 Started into production 44,000
Total units 47,000
Units accounted for
Transferred out 42,000 42,000 42,000
Work in process, March 31 5,000 5,000 4,000 (5,000 × 80%)
Ex. 165
The Nitrogen Fixation Department of Tomco Manufacturing began the month of December with beginning work in process of 4,000 units that are 100% complete as to materials and 30% complete as to conversion costs. Units transferred out are 10,000 units. Ending work in process contains 5,000 units that are 100% complete as to materials and 60% complete as to conversion costs.
Instructions
Compute the equivalent units of production for materials and conversion costs for the month of December.
Ans: N/A, SO: 5, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 165 (10 min.)
Equivalent Units Quantities Physical Units Materials Conversion Costs Units to be accounted for
Work in process, December 1 4,000 Started into production 11,000
Total units 15,000
Units accounted for
Transferred out 10,000 10,000 10,000
Work in process, December 31 5,000 5,000 3,000 (5,000 × 60%)
Total units 15,000 15,000 13,000
Ex. 166
At Crenshaw Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of work done on conversion, and production data for its Painting Department in selected months are as follows:
Beginning Work In Process Ending Work In Process Percentage Units Completed Percentage Month Units Completed and Transferred Out Units Completed
July -0- — 10,000 500 90%
Sept. 2,500 20% 9,000 2,000 70%
Instructions
(a) Compute the physical units for July.
(b) Compute the equivalent units of production for materials and conversion costs for September.
Ans: N/A, SO: 5,6, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 166 (10–14 min.)
(a) COMPUTATION OF PHYSICAL UNITS
July Beginning work in process -0- Started into production 10,500 Total units to be accounted for 10,500
Transferred out 10,000
Ending work in process 500 Total units accounted for 10,500
(b) COMPUTATION OF EQUIVALENT UNITS
Equivalent Units Units accounted for Physical Units Materials Conversion Costs
Transferred out 9,000 9,000 9,000
Work in process, Sept. 30 2,000 2,000 1,400 (2,000 × .70) Total equivalent units 11,000 11,000 10,400
Ex. 167
Watts Company adds materials at the beginning of the process and conversion costs are incurred uniformly throughout the process.
Instructions
Complete the following calculation of equivalent units for materials and conversion costs. Equivalent Units Physical Units Materials Conversion Costs Completed and transferred out 40,000 Ending work in process
Materials
Conversion costs, 75% complete 6,000
Total units
Ans: N/A, SO: 5,6, Bloom: AN, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 167 (4–7 min.)
Equivalent Units Physical Units Materials Conversion Costs Completed and transferred out 40,000 40,000 40,000 Ending work in process
Materials 8,000* 8,000*
Conversion costs—75% complete 6,000
Total units 48,000 46,000
Ex. 168
The general ledger of Oates Company has the following work in process account. WORK IN PROCESS—FINISHING
6/1 Balance 8,000 6/30 Transferred out ? 6/30 Materials 1,800
6/30 Labor 2,400
6/30 Overhead 2,800
6/30 Balance ?
Production records show that there were 2,000 units in beginning inventory, 50% complete; 4,000 units started, and 3,500 units transferred out. The beginning work in process had conversion costs of $3,300. The units in ending inventory were 60% complete. Materials are added at the beginning of the process.
Instructions
Answer the following questions.
(a) How many units are in process at June 30? (b) What is the unit conversion cost for June?
(c) What is the conversion cost in the June 30 inventory?
Ans: N/A, SO: 5,6, Bloom: AP, Difficulty: Hard, Min: 10, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 168 (10–14 min.)
(a) Work in process, June 1 2,000 Started into production 4,000 Units to be accounted for 6,000 Less: Transferred out 3,500 Work in process, June 30 2,500
(b) Conversion costs Physical Units Equivalent Units
Transferred out 3,500 3,500
Work in process, June 30 2,500 1,500 (2,500 × .60)
Total 6,000 5,000
Unit conversion cost = $1.70 ($3,300 + $5,200) ÷ 5,000 = $1.70
(c) Conversion cost in June 30 inventory: 1,500 × $1.70 = $2,550
Ex. 169
The Assembly Department uses a process cost accounting system and a weighted-average cost flow assumption. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July, $190,000 of materials costs and $135,000 in conversion costs were charged to the department. The beginning work in process inventory was $103,000 on July 1, comprised of $80,000 of materials costs and $23,000 of conversion costs.
Other data for the month of July are as follows:
Beginning work in process inventory, 7/1 25,000 units (40% complete) Units completed and transferred out 70,000 units
Ex. 169 (Cont.)
Instructions
Answer the following questions and show computations to support your answers. 1. How many physical units have to be accounted for in July?
2. What are the equivalent units of production for materials and for conversion costs for the month of July?
3. What is the total cost assigned to the 90,000 units that were transferred out of the process in July?
4. What is the total cost of the July 31 inventory?
Ans: N/A, SO: 5,6, Bloom: AP, Difficulty: Hard, Min: 15, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management
Solution 169 (15–20 min.)
1. Units transferred out 70,000 Work in process, July 31 30,000 Units accounted for 100,000
2. Equivalent units of production:
Equivalent Units Physical Units Materials Conversion Costs
Transferred out 70,000 70,000 70,000
Work in process, July 31 30,000 30,000 9,000*
Total 100,000 100,000 79,000
*(30,000 × .30)
3. Materials cost per unit = $2.70 ($270,000* ÷ 100,000 units) Conversion cost per unit = $2.00 ($158,000** ÷ 79,000 units)
Total unit cost $4.70
*($80,000 + $190,000) **($23,000 + $135,000)
Total cost assigned to units transferred out: 70,000 × $4.70 = $329,000
4. Total cost of July 31 inventory: (30,000 × $2.70) + (9,000 × $2.00) = $99,000
Ex. 170
The Finishing Department of Edwards Manufacturing has the following production and cost data for July:
1. Transferred out, 3,000 units.
2. Started 2,000 units that are 40% completed at July 31.
3. Materials added, $30,000; conversion costs incurred, $19,000.