Superior Micro Products uses the weighted-average method in its process costing
ID: 2341226 • Letter: S
Question
Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,800 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $686,788 in total. The ending work in process inventory in January consisted of 3,300 units, which were 50% complete with respect to materials and 30% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Materials Labor Overhead $13.20 3.40 7.80 Cost per equivalent unit Required: 1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month. 2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January. 3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January. 4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)Explanation / Answer
Solution:
Part 1 – Equivalent Units
Materials
Labor
Overhead
Equivalent Units (Refer Note 1)
28,450
27,790
27,790
Note 1
Equivalent Units
Physical Units
Materials
Labor
Overhead
Units Completed and Transferred to Next Department (100% Complete in all respect)
26,800
26,800
26,800
26,800
Ending Work In Process (50% Completed to material and 30% complete to labor and overhead)
3,300
1,650
990
990
Total
28,450
27,790
27,790
Part 2 –
Cost of Ending Work In Process
Materials
Labor
Overhead
Total
Equivalent Units (A)
1650
990
990
Cost per Equivalent Unit (B)
$13.20
$3.40
$7.80
Total Cost of Ending Work in Process (A*B)
$21,780.00
$3,366.00
$7,722.00
$32,868.00
Part 3 – Cost of the units transferred to next department
Cost of the units transferred to next department
Materials
Labor
Overhead
Total
Equivalent Units (A)
26800
26800
26800
Cost per Equivalent Unit (B)
$13.20
$3.40
$7.80
Total Cost of units transferred to next dept. (A*B)
$353,760.00
$91,120.00
$209,040.00
$653,920.00
Part 4 –
Cost Reconciliation
Total Cost to be accounted for
$686,788
Costs accounted for as follows
Ending Work In Process
$32,868.00
Units Completed and Transferred
$653,920.00
Total Cost accounted for
$686,788.00
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Materials
Labor
Overhead
Equivalent Units (Refer Note 1)
28,450
27,790
27,790
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