The ledger of Custer Company has the following work in process account. Work in

Question

              The   ledger of Custer Company has the following work in process account.                 Work in     Process The ledger of Custer Company has the following work in process account. Production records show that there were 440 units in the beginning inventory, 30% complete, 1,600 units started, and 1,410 units transferred out. The beginning work in process had materials cost of $2,890 and conversion costs of $1,680. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process. How many units are in process at May 31? What is the unit materials cost for May? What is the unit conversion cost for May?

Explanation / Answer

Prepare quantity schedule:
In process beginning 400
Started in the period 1100
Total to be accted for 1500
Transferred out 1200
In process ending 300 (balancing figure)
Total accted for 1500

Calculate equivalent units
(The question does not say FIFO or AVCO - hence AVCO is used)
Description ---- Total ---- Materials --Conversion
Transferred out 1200 ------1200 ----- 1200
In process ending 300 ------ 300 -------120 (300x40%)
Total EPU ---------------------1500 ------1320

Cost Schedule:

Materials:
In process beginning 2,040
Added in period 5,160
Total Materials cost 7,200
Equivalent units 1,500
Unit costs $4.80

Conversion:
In process beginning 1,550
Added during period
Labor ------------------ 2,740
Overheads ------------ 1,650
Total conversion costs5,940
Equivalent units ........ 1320
Unit costs $4.50

Cost of units transferred out 1,200 x ($4.80 + 4.50) = $11,160

Cost of in process inventory:
Materials 300 x $4.80 = $1,440
Conversion 120 x $4.50=540
Total cost ---------$1,980

Proof:
Costs to be accounted for (per question)
$3590+5160+2740+1650=$13,140

Costs accounted for:
Transferred $11,160 + In process 1,980 = $13,140

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.