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) How many units are in process at May 31? Work in process May .1 510 Started into production 1,430 Total units to be accounted for 1,940 Less: Transferred out (1,450) Work in process, May 31 490 (b) What is the unit materials cost for May? Units Units transferred out 1,450 Work in process, May 31 490 1,940 Cost Work in process, May 1 $ 2,200 Costs added: Material $ 5,510 Total Cost $ 7,710 Unit Material Cost $ 3.97 (c) What is the unit conversion cost for May? Units Units transferred out 1,450 Work in process, May 31 196 (480 X 40%) 1,646 Work in process, May 1 $ 1,690 Costs added: Labor $ 2,970 Overhead $ 1,590 Total Cost $ 6,250 Unit Conversion Cost $ 3.80 (d) What is the total cost of units transferred out in May? Material ( 1,450 X 3.97) 5,763 Conversion Cost (1,450 X 3.80) 5,506 Total Cost of transferred out 11,268 (e) What is the cost of the May 31 inventory? Material ( 480 X 3.97) 1,947 Conversion Cost (192 X 3.80) 744 Total Cost of May 31 inventory 2,692
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