The PVC Company manufactures a high-quality plastic pipe that goes through three
ID: 2378151 • Letter: T
Question
The PVC Company manufactures a high-quality plastic pipe that goes through three processing stages prior to completion.
Compute the costs per equivalent unit for the month. (Round your answers to 2 decimal places.)
Determine the cost of ending work in process inventory and of the units transferred out to the next department. (Round your intermediate calculation to 2 decimal places and final answers to the nearest whole dollar amount.)
Prepare a cost reconciliation report for the month. (Round your intermediate calculation to 2 decimal places and final answers to the nearest whole dollar amount.)
The PVC Company manufactures a high-quality plastic pipe that goes through three processing stages prior to completion.
Explanation / Answer
1. Equivalent units of production:
Pounds started and completed = 87,000 + 520,000 - 47,000 = 560,000
Materials:
560,000 + 47,000*.75 = 595,250 equivalent units
conversion:
560,000 + 47,000*.25 = 571,750 equivalent units
2. Cost per equivalent unit:
materials:
(142,100 + 738,870)/595,250 = $1.48 per equivalent unit
conversion:
(63,300 + 348,360)/571,750 = $0.72 per equivalent unit
3.
Cost of work in process inventory:
Materials: 47,000*.75*1.48 = $52,170
conversion: 47,000*.25*.72 = $8,460
cost of units completed and transferred out:
Materials: 560,000*1.48 = $828,800
conversion: 560,000*.72 = $403,200
total:
materials: 52,170 + 828,800 = $880,970
conversion: 8,460 + 403,200 = $411,660
4. cost reconciliation
Cost to be accounted for:
Cost of beginning work in process: 205,400
Cost added to production during the period: 1,087,230
total cost to be accounted for: 1,292,630
Costs accounted for as follows:
Cost of ending work in process inventory: 60,630
cost of units completed and transferred out: 1,232,000
total cost accounted for: 1,292,630
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