Exercise 17-8 (Part Level Submission) The Blending Department of Luongo Company

Question

Exercise 17-8 (Part Level Submission) The Blending Department of Luongo Company has the following cost and production data for the month of April Costs: Work in process, April 1 Direct materials: 100% complete Conversion costs: 20% complete Cost of work in process, April 1 $108,000 75,600 $183,600 Costs incurred during production in April Direct materials $864,000 394,200 $1,258,200 Conversion costs Costs incurred in April Units transferred out totaled 18,360. Ending work in process was 1,080 units that are 100% complete as to materials and 40% complete as to conversion costs. Your answer is correct. Compute the equivalent units of production for (1) materials and (2) conversion costs for the month of April Materials Conversion Costs The equivalent units of production 19440 18792

Explanation / Answer

Solution c:

Cost to be assigned to units transferred out= equivalent unit transferred out* (unit cost for material + unit cost for conversion)

= 18360 *($50 + $25) = $1,377,000

Cost to be assigned to ending work in process = (Equivalent unit in ending WIP for material * unit cost for material + (equivalent unit in ending WIP for conversion * unit cost for conversion)

= (1080*100%*$50) + (1080*40%*$25)

= $54000 + $10800 = $64,800

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