2. The Hoed Corp. manufactures hats. All material is placed in process at the be
ID: 2410966 • Letter: 2
Question
2. The Hoed Corp. manufactures hats. All material is placed in process at the beginning of the period in Department A and conversion costs evenly throughout the process. Upon completion goods are immediately transferred to Department B. Department A- Month of April 2000 Status -work in process 3/31/00 50% conversion Units 20,000 completed at a cost of S 300,000 ($ 250,000 material and $ 50,000 conversion) Units started during April - Units completed during April - work in process April 30th were 50% completed 50,000 30,000 40,000 for conversion - Direct material added during April -Conversion cost added during April $ 450,000 $ 100,000 Required Calculate total cost of goods transferred out during April. - Calculate total cost of ending work in process.Explanation / Answer
Statement of Equivalent production Particulars Direct Materials %completion Equivalent mat Conversion %completion Equivalent Conv Total Opening WIP 20,000.00 100% 20,000.00 20,000.00 100% 20,000.00 Units started and completed=30000 - 20000 10,000.00 100% 10,000.00 10,000.00 100% 10,000.00 ending WIP 40,000.00 100% 40,000.00 40,000.00 50% 20,000.00 Equivalent Units 70,000.00 50,000.00 Opening WIP Costs 250,000.00 50,000.00 300,000.00 Current Month Costs 450,000.00 100,000.00 550,000.00 Total costs 700,000.00 150,000.00 850,000.00 Cost per Equivalent units 10.00 3.00 Ending WIP Units 40,000.00 20,000.00 Cost of Ending WIP 400,000.00 60,000.00 460,000.00 Goods Transferred out 30,000.00 30,000.00 Total Cost of Units transferred out 300,000.00 90,000.00 390,000.00 Note - Assumed Weighted average method in absence of information
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