CALCULATOR PRINTER VERSION BACK Exercise 3-3 The ledger of American Company has

Question

CALCULATOR PRINTER VERSION BACK Exercise 3-3 The ledger of American Company has the following work in process account. Work in Process-Painting 5/1 Balance 3,690 5/31 Transferred out ? 5/31 Materials 5,610 5/31 Labor 3,730 5/31 Overhead 2,480 5/31 Balance Production records show that there were 410 units in the beginning inventory, 30% complete, 1,720 units started, and 1,490 units transferred out. The beginning work in process had materials cost of $2,240 and conversion costs of $1,450 The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

Explanation / Answer

FIFO method Beggining units 410 Transferred out 1,490 Started into production 1720 Ending units 640 2130 2130 Equivalent units Material Conversion Beginning units 410 410 Completion in current period 0% 70% A 0 287 Units started and completed 1080 1080 Completion 100% 100% B 1080 1080 Ending Units 640 640 Completion 100% 40% C 640 256 Total units A+B+C 1720 1623 Cost per equivalent units Per unit cost Cost Total units Per unit cost Material cost 5610 1720 3.262 Conversion cost 6210 1623 3.826 Total 11820 7.088 Cost of goods sold Material convertion cost Beginning work in progress A 2240 1450 3690 Beginning inventory completed Completion 0% 70% Per unit cost 3.26 3.83 Units 410 410 Total cost   B 0 1098 1098 Units started and completed Completion 100% 100% Per unit cost 3.26 3.83 Units 1080 1080 Total cost    C 3523 4132 7655 Total cost A+B+C 5763 5230 12443 Ending work in progress Completion 100% 40% Per unit cost 3.26 3.83 Units 640 640 Total cost     2087 980 3067

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