Production Costs A.) Determine the equivalent units of production for (1) materi

Question

Production

Costs

A.) Determine the equivalent units of production for (1) materials and (2) conversion costs.

B.) Compute unit costs.

C.) Show the assignment of manufacturing costs to units transferred out and in work in process.

PLEASE ANSWER ALL QUESTIONS!

The Cutting Department of Keigi Company has the following production and cost data for August.

Production

Costs

1. Started and completed 8,310 units. Beginning work in process $0 2. Started 2,080 units that are 40% completed at August 31. Materials 51,950 Labor 14,620 Manufacturing overhead 21,034
Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process. Keigi Company uses the FIFO method to compute equivalent units.

Explanation / Answer

A) 1) Equivalent cost of units - material cost Units % complete equivalent units completed units 8310 100% 8310 WIP 2080 100% 2080 Equivalent units - material 10390 2) Equivalent cost of units - conversion cost Units % complete equivalent units completed units 8310 100% 8310 WIP 2080 40% 832 Equivalent units - conversion cost 9142 B) Unit cost of production Unit cost of material = 51950 /10390 = 5.00 Unit cost of conversion = (14620 + 21034) /9142 = 3.90 Total unit cost = 5 + 3.90 = 8.90 C) Cost of units transferred out ( 8310 * 8.90) 73959 Cost of units in progress : Materials ( 2080 * 5) = 10400 10400.00 Conversion cost ( 832 * 3.90)( refer working above) 3244.80 Total cost 13644.80

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