The following information concerns production in the Forging Department for Sept
ID: 2416918 • Letter: T
Question
The following information concerns production in the Forging Department for September. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $63,900 of direct materials. Based on the above data, determine each of the following amounts. If required, round your interim calculations to two decimal places. Round final answers (a-c) to the nearest dollar. Cost of beginning work in process inventory completed in September. $ Cost of units transferred to the next department during September. Cost of ending work in process inventory on September 30. $ 2,160 Costs per equivalent unit of direct materials and conversion included in the September 1 beginning work in process. If required, round your answers to two decimal places. Direct materials cost per equivalent unit $ Conversion cost per equivalent unit $ The September increase or decrease in costs per equivalent unit for direct materials and conversion from the previous month. If required, round your answers to two decimal places. Change in direct materials cost per equivalent unit $ Change in conversion cost per equivalent unit $Explanation / Answer
Equivalent Units
Whole Units
Direct Materials
Conversion
Inventory in process, Sept 1 (70% completed)
4,500
0
1,350
Started and completed in September*
37400
37,400
37,400
Transferred to finished goods in September
41,900
37,400
38,750
Inventory in process, September 30 (60% completed)
3,600
3,600
2,160
Total units
45,500
41,000
40,910
*41,000 - 3,600
Costs
Direct Materials
Conversion
Total costs for September in Forging Department
$5,74,000
$98,184
Total equivalent units (from above)
41,000
40,910
Cost per equivalent unit
$14.00
$2.40
a. $78,386; determined as follows:
Beginning work in process balance........................................................ $ 71,145
Conversion costs incurred during September
(1,350 equivalent units × $2.40)............................................................. $3,240
Cost of beginning work in process completed during September. $74,385
b. Cost of beginning work in process.......................................................... $74,385
Cost of units started and completed during September.................... $613,360*
Cost of units transferred to finished goods during September....... $687,745
*($14 + $2.40) × 37,400 units
c. $79,380; determined as follows:
Direct materials ($14 × 3,600 units)........................................................... $50,400
Conversion costs ($2.40 × 2,160 equivalent units).............................. $5,184
Cost of ending work in process inventory............................................. $55,584
Note: The cost of ending work in process is also the ending balance of the Work in Process—Forging Department as of September 30.
d. Direct materials cost per equivalent unit: $14.20 ($63,900/4,500 units)
Conversion cost per equivalent unit: $2.30 ($7,245*/3,150 units**)
*Work in process, September 1........................................................... $71,145
Less direct materials cost.................................................................... $63,900
Conversion cost included in September 1, work in process..... $7,245
**Equivalent units in September 1, work in process (4,500 × 70%) = 3,150 units
e. Direct materials: Decrease of $0.20 ($14 – $14.20)
Conversion: Increase of $0.10 ($2.40 – $2.30)
Equivalent Units
Whole Units
Direct Materials
Conversion
Inventory in process, Sept 1 (70% completed)
4,500
0
1,350
Started and completed in September*
37400
37,400
37,400
Transferred to finished goods in September
41,900
37,400
38,750
Inventory in process, September 30 (60% completed)
3,600
3,600
2,160
Total units
45,500
41,000
40,910
*41,000 - 3,600
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.