Exercise 16-3 The ledger of American Company has the following work in process a

Question

Exercise 16-3 The ledger of American Company has the following work in process account. Work in Process—Painting 5/1 Balance 3,790 5/31 Transferred out ? 5/31 Materials 5,790 5/31 Labor 2,830 5/31 Overhead 2,280 5/31 Balance ? Production records show that there were 470 units in the beginning inventory, 30% complete, 1,710 units started, and 1,450 units transferred out. The beginning work in process had materials cost of $2,140 and conversion costs of $1,650. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

Explanation / Answer

Solution:

Computation of Equivalent unit of Production - Weighted Average Particulars Physical Units Material Conversion Unit completed & Transferred out 1450 1450 1450 Closing WIP: 730 Material (100%) 730 Conversion (40%) 292 Equivalent units of production 2180 2180 1742

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