AE3-6 The Cutting Department of Groneman Manufacturing has the following product

ID: 2343480 • Letter: A

Question

AE3-6

The Cutting Department of Groneman Manufacturing has the following production and cost data for July.
Production
Costs

1. Transferred out 9,400 units. Beginning work in process $ -0-
2. Started 3,100 units that are 60% complete as Materials 46,700
to conversion costs and 100% complete as Labor 17,400
to materials at July 31. Manufacturing overhead 20,900

Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process.

Incorrect.

Determine the equivalent units of production for (1) materials and (2) conversion costs.
Materials
Conversion costs

Incorrect.

Compute unit costs and prepare a cost reconciliation schedule. (Round unit costs to 2 decimal places, e.g. 10.50. Use rounded amounts for future calculations. Round all other answers to 0 decimal places, e.g. 125.)
Unit cost-Materials $
Unit cost-Conversion costs $

Costs accounted for
Transferred out $
Work in process, July 31
Materials $
Conversion costs

Total costs $

Explanation / Answer

Determine the equivalent units of production for (1) materials and (2) conversion costs.
Materials: 9,400 + 3,100 = 12,500 equivalent units
Conversion costs: 9,400 + 1860 = 11,260 equivalent units

Compute unit costs and prepare a cost reconciliation schedule. (Round unit costs to 2 decimal places, e.g. 10.50. Use rounded amounts for future calculations. Round all other answers to 0 decimal places, e.g. 125.)
Unit cost-Materials: 46,700/12,500 = $3.74 per equivalent unit
Unit cost-Conversion costs: (17400 + 20900)/11,260 = $3.40 per equivalent unit

Costs accounted for

Transferred out

WIP

Materials

35,156

11,594

Conversion costs

31,960

6,324

Total costs

67116

17918