Exercise 16-3 Work in Process—Painting LINK TO TEXT LINK TO TEXT LINK TO TEXT Ex
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Question
Exercise 16-3
Work in Process—Painting
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Exercise 16-3
The ledger of Custer Company has the following work in process account.Work in Process—Painting
5/1 Balance 3,700 5/31 Transferred out ? 5/31 Materials 5,510 5/31 Labor 2,970 5/31 Overhead 1,590 5/31 Balance ?Production records show that there were 510 units in the beginning inventory, 30% complete, 1,430 units started, and 1,450 units transferred out. The beginning work in process had materials cost of $2,200 and conversion costs of $1,690. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.
Explanation / Answer
a) Determine the units are in process on May 31:
Details
Units
Beginning WIP inventory
510
Add: Started units
1,430
Less: Transferred out units
1,450
Ending WIP units at May 31
490
b) Calculation of the unit materials cost for May:
Details
Amount
Material cost
$ 5,510
Beginning WIP material cost
$ 2,200
Total material cost for may
$ 7,710
Number of units (510 +1430)
1,940.00
Unit material cost
$ 3.974
c) Calculation of the unit conversion cost for May:
Details
Amount
Conversion cost ($2970+1590)
$ 4,560
Beginning WIP conversion cost
$ 1,690
Total conversion cost for may
$ 6,250
Number of units (510 +1430)
1,940
Unit conversion cost
$ 3.222
a) Calculation of the total cost of units transferred out in May:
Details
Amount
Material cost
$ 7,710
Conversion cost
$ 6,250
Total cost
$ 15,420
Number of units in May
1940
Cost per unit
7.948
Details
Units
Beginning WIP inventory
510
Add: Started units
1,430
Less: Transferred out units
1,450
Ending WIP units at May 31
490
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