The ledger of Custer Company has the following work in process account. Work in
ID: 2415682 • Letter: T
Question
The ledger of Custer Company has the following work in process account. Work in Process-Paint 590 5/31 Transferred out ? 5/1 Balance 3,5 5/31 Materials 5,160 5/31 Labor 2,740 5/31 Overhead 1,380 5/31 Balance Production records show that there were 400 units in the beginning inventory, 30% complete, 1,400 units started, and 1,500 units transferred out. The beginning work in process had materials cost of $2,040 and conversion costs of $1,550. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process Your answer is incorrect. Try again (a) How many units are in process at May 31? Work in process, May 31 (b) What is the unit materials cost for May? (Round unit cost to 3 decimal places, e.g. 2.257.) The unit materials cost for May 1320 unitsExplanation / Answer
Solution (a)
Work in process, May 1
400 Units
Started into production
1,400 Units
Total units to be accounted for
1,800 Units
Less: Transferred out
1,500 Units
Work in process, May 31
300 Units
Solution (b)
Equivalent Units
Materials
Conversion Cost
Units transferred out
1,500
1,500
Work in process, May 31
300 × 100%
300
300 × 40%
120
1,800
1,620
Direct Materials
Conversion Cost
Work in process, May 31
2,040
1,550
Cost added
5,160
4,120 (2,740 + 1,380)
7,200
5,670
The Units Material cost for May = 7,200 / 1,800
The Units Material cost for May = $4
Solution (c)
The unit conversion cost for May = 5,670 / 1,620
The unit conversion cost for May = $3.50
Solution-(a)
Transferred out = (1,500 × $7.50)
Transferred out = $11,250
Solution-(b)
Work in process material (300 × $4.00)
$1,200
Conversion costs (120 × $3.50)
$420
Cost of the May 31 inventory
$1,620
Work in process, May 1
400 Units
Started into production
1,400 Units
Total units to be accounted for
1,800 Units
Less: Transferred out
1,500 Units
Work in process, May 31
300 Units
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