Badgersize Company has the following information for its Forming Department for
ID: 2337658 • Letter: B
Question
Badgersize Company has the following information for its Forming Department for the month of August.
Work in Process Inventory, August 1: 20,000 units
Direct materials: 100% complete
$
80,000
Conversion: 20% complete
24,000
Balance in work in process, August 1
$
104,000
Units started during August
54,000
Units completed and transferred in August
58,000
Work in process (70% complete), August 31
?
Costs charged to Work in Process in August
Direct materials
$
164,000
Conversion costs:
Direct labor
$
101,000
Overhead applied
139,000
Total conversion
$
240,000
Assume materials are added at the start of processing.
Required:
a. Calculate the equivalent units for the Forming Department for the month of August.
Direct Materials:
Conversion:
b. Find the cost per equivalent unit of input resource. (Round your answers to 2 decimal places.)
Direct Materials:
Conversion:
Work in Process Inventory, August 1: 20,000 units
Direct materials: 100% complete
$
80,000
Conversion: 20% complete
24,000
Balance in work in process, August 1
$
104,000
Units started during August
54,000
Units completed and transferred in August
58,000
Work in process (70% complete), August 31
?
Costs charged to Work in Process in August
Direct materials
$
164,000
Conversion costs:
Direct labor
$
101,000
Overhead applied
139,000
Total conversion
$
240,000
Explanation / Answer
Since method of calculating Equivalent units was not provided in the question. Solution is provided for Weighted average method and FOFO method .
Weighted average
Units
Reconciliation of Units
A
Opening WIP
20,000
B
Introduced
54,000
C=A+B
TOTAL
74,000
D
Transferred
58,000
E=C-D
Closing WIP
16,000
Statement of Equivalent Units (Weighted Average)
Material
Conversion Cost
Units
Complete %
Equivalent units
Complete %
Equivalent units
Transferred
58,000
100%
58,000
100%
58,000
Closing WIP
16,000
100%
16,000
70%
11,200
Total
74,000
Total
74,000
Total
69,200
Cost per Equivalent Units (Weighted Average)
COST
Material
Conversion Cost
TOTAL
Beginning WIP Inventory Cost
$ 80,000.00
$ 24,000.00
$ 104,000.00
Cost incurred during period
$ 164,000.00
$ 240,000.00
$ 404,000.00
Total Cost to be accounted for
$ 244,000.00
$ 264,000.00
$ 508,000.00
Total Equivalent Units
74,000
69,200
Cost per Equivalent Units
$ 3.2973
$ 3.8150
Statement of cost (Weighted Average)
Cost
Equivalent Cost/unit
Ending WIP
Transferred
Units
Cost Allocated
Units
Cost Allocated
Material
$ 3.30
16,000
$ 52,756.76
58,000
$ 191,243.24
Conversion Cost
$ 3.82
11,200
$ 42,728.32
58,000
$ 221,271.68
TOTAL
$ 508,000.00
TOTAL
$ 95,485.08
TOTAL
$ 412,514.92
Cost to be accounted for
Beginning Work In Progress:
Material
$ 80,000.00
Conversion Cost
$ 24,000.00
$ 104,000.00
Cost incurred during period:
Cost Transferred
$ -
Material
$ 164,000.00
Conversion Cost
$ 240,000.00
$ 404,000.00
Total Cost to be accounted for
$ 508,000.00
Cost accounted for
Cost of Units transferred
Equivalent Units
Cost per Equivalent Units
Cost accounted for
Material
58,000
$ 3.30
$ 191,243.24
Conversion Cost
58,000
$ 3.82
$ 221,271.68
$ 412,514.92
Cost of ending WIP
Equivalent Units
Cost per Equivalent Units
Cost accounted for
Cost Transferred
-
$ -
$ -
Material
16,000
$ 3.30
$ 52,756.76
Conversion Cost
11,200
$ 3.82
$ 42,728.32
$ 95,485.08
Total Cost accounted for
$ 508,000.00
FIFO METHOD
EUP-FIFO Method
Units
% Material
EUP Material
% Conversion
EUP Conversion
Beginning Work in Process
20000
100%
20000
20%
4000
Started and completed
54000
100%
54000
100%
54000
Ending Work in Process
16000
100%
16000
70%
11200
Total Units
90000
90000
69200
Cost per Equivalent Unit of Production
Materials
Conversion
Cost incurred
$ 164,000.00
$ 240,000.00
Total costs
Costs
$ 164,000.00
Costs
$ 240,000.00
EUP
EUP
90000
EUP
69200
Cost per Equivalent Units of production
$ 1.82
$ 3.47
Total cost accounted for: Under FIFO
Beginning Inventory Cost:
$ 104,000.00
Cost to complete beginning inventory
EUP
Cost per EUP
Total cost
Direct Material
20000
$ 1.82
36444.44444
Conversion
4000
$ 3.47
13872.83237
Total cost to complete beginningf inventory
50317.27681
Total cost of units in beginning inventory
$ 154,317.28
Cost of units started and completed
EUP
Cost per EUP
Total cost
Direct Material
54000
$ 1.82
$ 98,400.00
Conversion
54000
$ 3.47
$ 187,283.24
Total cost of units started and completed
$ 285,683.24
Total cost of Units transferred out
$ 440,000.51
Costs of Ending WIP:
EUP
Cost per EUP
Total cost
Direct Material
16000
$ 1.82
$ 29,155.56
Conversion
11200
$ 3.47
$ 38,843.93
Total cost of Ending WIP
$ 67,999.49
Total cost accounted for
$ 508,000.00
Weighted average
Units
Reconciliation of Units
A
Opening WIP
20,000
B
Introduced
54,000
C=A+B
TOTAL
74,000
D
Transferred
58,000
E=C-D
Closing WIP
16,000
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