16-5A Problem 16-5A Polk Company manufactures basketballs. Materials are added a
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Question
16-5A
Problem 16-5A Polk Company manufactures basketballs. Materials are added at the beginning of the production process and conversion costs are incurred uniformly. Production and cost data for the month of July 2017 are as follows. Percent Units Complete Production Data-Basketballs Work in process units, July 1 Units started into production Work in process units, July 31 Cost Data-Basketballs Work in process, July 1 60% 500 1,000 600 40% Materials $750 Conversion costs Direct materials Direct labor Manufacturing overhead 600 1,350 2,400 1,580 1,240 Calculate the equivalent units of production for materials and conversion costs. Materials Conversion Costs Equivalent Units LINK TO TEXT Calculate the unit costs of production for materials and conversion costs. (Round unit costs to 3 decimal places, e.g. 2.257.) Materials Conversion Costs Cost per unit LINK TO TEXT Calculate the assignment of costs to units transferred out and in process at the end of the accounting period. (Round answers to O decimal places, e.g. 2,25o.) Costs accounted for: Transferred out Work in process, July 31 Materials Conversion costs Total costsExplanation / Answer
It was not stated in the question which method is required to be used so I have given solutions for Weighted average and FIFO Methods
Units
Reconciliation of Units
A
Opening WIP
500
B
Introduced
1,000
C=A+B
TOTAL
1,500
D
Transferred
900
E=C-D
Closing WIP
600
Statement of Equivalent Units (Weighted Average)
Material
Conversion Cost
Units
Complete %
Equivalent units
Complete %
Equivalent units
Transferred
900
100%
900
100%
900
Closing WIP
600
100%
600
40%
240
Total
1,500
Total
1,500
Total
1,140
Cost per Equivalent Units (Weighted Average)
COST
Material
Conversion Cost
TOTAL
Beginning WIP Inventory Cost
$ 750.00
$ 600.00
$ 1,350.00
Cost incurred during period
$ 2,400.00
$ 2,820.00
$ 5,220.00
Total Cost to be accounted for
$ 3,150.00
$ 3,420.00
$ 6,570.00
Total Equivalent Units
1,500
1,140
Cost per Equivalent Units
$ 2.1000
$ 3.0000
Statement of cost (Weighted Average)
Cost
Equivalent Cost/unit
Ending WIP
Transferred
Units
Cost Allocated
Units
Cost Allocated
Cost Transferred
$ -
-
$ -
-
$ -
Material
$ 2.10
600
$ 1,260.00
900
$ 1,890.00
Conversion Cost
$ 3.00
240
$ 720.00
900
$ 2,700.00
TOTAL
TOTAL
$ 1,980.00
TOTAL
$ 4,590.00
Cost to be accounted for
Beginning Work In Progress:
Material
$ 750.00
Conversion Cost
$ 600.00
$ 1,350.00
Cost incurred during period:
Cost Transferred
$ -
Material
$ 2,400.00
Conversion Cost
$ 2,820.00
$ 5,220.00
Total Cost to be accounted for
$ 6,570.00
Cost accounted for
Cost of Units transferred
Equivalent Units
Cost per Equivalent Units
Cost accounted for
Material
900
$ 2.10
$ 1,890.00
Conversion Cost
900
$ 3.00
$ 2,700.00
$ 4,590.00
Cost of ending WIP
Equivalent Units
Cost per Equivalent Units
Cost accounted for
Material
600
$ 2.10
$ 1,260.00
Conversion Cost
240
$ 3.00
$ 720.00
$ 1,980.00
Total Cost accounted for
$ 6,570.00
EUP-FIFO Method
Units
% Material
EUP Material
% Conversion
EUP Conversion
Beginning Work in Process
500
100%
500
60%
300
Started and completed
900
100%
900
100%
900
Ending Work in Process
600
100%
600
40%
240
Total Units
2000
2000
1440
Cost per Equivalent Unit of Production
Materials
Conversion
Cost incurred
$ 2,400.00
$ 2,820.00
Total costs
Costs
$ 2,400.00
Costs
$ 2,820.00
EUP
EUP
2000
EUP
1440
Cost per Equivalent Units of production
$ 1.20
$ 1.96
Total cost accounted for:
Beginning Inventory Cost:
$ 1,350.00
Cost to complete beginnig inventory
EUP
Cost per EUP
Total cost
Direct Material
500
$ 1.20
600
Conversion
300
$ 1.96
587.5
Total cost to complete beginningf inventory
1187.5
Total cost of units in beginning inventory
$ 2,537.50
Cost of units started and completed
EUP
Cost per EUP
Total cost
Direct Material
900
$ 1.20
$ 1,080.00
Conversion
900
$ 1.96
$ 1,762.50
Total cost of units started and completed
$ 2,842.50
Total cost of Units transferred out
$ 5,380.00
Costs of Ending WIP:
EUP
Cost per EUP
Total cost
Direct Material
600
$ 1.20
$ 720.00
Conversion
240
$ 1.96
$ 470.00
Total cost of Ending WIP
$ 1,190.00
Total cost accounted for
$ 6,570.00
Units
Reconciliation of Units
A
Opening WIP
500
B
Introduced
1,000
C=A+B
TOTAL
1,500
D
Transferred
900
E=C-D
Closing WIP
600
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