Timing Technology, Inc. manufactures timing devices. During 20x1, 1,300,000 unit
ID: 2337102 • Letter: T
Question
Timing Technology, Inc. manufactures timing devices. During 20x1, 1,300,000 units were completed and transferred to finished-goods inventory. On December 31, 20x1, there were 310,000 units in work in process. These units were 47 percent complete as to conversion and 100 percent complete as to direct material. Finished-goods inventory consisted of 364,000 units. Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each product at the rate of 100 percent of direct-labor costs. There was no finished-goods inventory on January 1, 20x1. A review of the inventory cost records disclosed the following information:
Costs
Problem 4-25 Part 3
3. Complete the following schedule as of December 31, 20x1, to compute the costs per equivalent unit for material and conversion. (Round "Cost per Equivalent Unit" to 2 decimal places.)
Costs
Units Materials Labor Work in process, January 1, 20x1 300,000 $ 306,000 $ 313,400 (82% complete as to conversion) Units started in production 1,310,000 Direct-material costs $ 2,270,000 Direct-labor costs $ 2,433,430Explanation / Answer
Units
Reconciliation of Units
A
Opening WIP
300,000
B
Introduced
1,310,000
C=A+B
TOTAL
1,610,000
D
Transferred
1,300,000
E=C-D
Closing WIP
310,000
Statement of Equivalent Units
Material
Conversion Cost
Units
Complete %
Equivalent units
Complete %
Equivalent units
Transferred
1,300,000
100%
1,300,000
100%
1,300,000
Closing WIP
310,000
100%
310,000
47%
145,700
Total
1,610,000
Total
1,610,000
Total
1,445,700
Cost per Equivalent Units
COST
Material
Conversion Cost
TOTAL
Beginning WIP Inventory Cost
$ 306,000.00
$ 626,800.00
$ 932,800.00
Cost incurred during period
$ 2,270,000.00
$ 4,866,860.00
$ 7,136,860.00
Total Cost to be accounted for (A)
$ 2,576,000.00
$ 5,493,660.00
$ 8,069,660.00
Total Equivalent Units (B)
1,610,000
1,445,700
Cost per Equivalent Units (A/B)
$ 1.60
$ 3.80
Working notes
calculation of Conversion cost
Beginning WIP
During the period
Direct Labor
$ 313,400.00
$ 2,433,430.00
Add: overheads applied (100% of Direct labor)`
$ 313,400.00
$ 2,433,430.00
Total Conversion cost
$ 626,800.00
$ 4,866,860.00
It is assumed that weighted average method is used in the question.
Units
Reconciliation of Units
A
Opening WIP
300,000
B
Introduced
1,310,000
C=A+B
TOTAL
1,610,000
D
Transferred
1,300,000
E=C-D
Closing WIP
310,000
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