All direct materials are placed into the process at the beginning of production,

Question

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 $96,760 of direct materials.

Balance

Debit

Credit

If required, round your interim calculations to two decimal places. Round final answers (a-c) to the nearest dollar.

a. Cost of beginning work in process inventory completed in September.
$

b. Cost of units transferred to the next department during September.
$

c. Cost of ending work in process inventory on September 30.
$

d. 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.

e. 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.

Date Item Debit Credit

Balance

Debit

Credit

Sept. 1 Bal., 8,200 units, 50% completed 110,290 30 Direct materials, 75,000 units 862,500 972,790 30 Direct labor 109,180 1,081,970 30 Factory overhead 150,784 ? 1,232,754 30 Goods finished, ? units ? 30 Bal., 6,600 units, 60% completed ?

Explanation / Answer

Solution:

(A). Cost of bgining Work-in Process:

Cost of Bgining Work-in Process = $ 96,760 + 9,72,790 - 1,10,290

   = $ 9,59,260

(B). Cost of Ending WIP:

Cost of Bgining Work-in Process = $96,760 + 32,87,514 - 11,22,464

   = $ 22,61,810

(C). Direct Material Cost Per Unit:

Direct Material Cost Per Unit = $ 96,760 + 11,22,464 / 75,000

= $ 16.25

(D). Conversion Cost Per Equivalent Unit:

Total Units of Conversion Costs = 8,200

Conversion Costs of Ending = 6,600

Total Equivalents Units = 14,800

Cost of Bgining Work-in Process = Begining Work-in Process + Previous years Work-in Process - Ending Work-in Process

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