Badgersize Company has the following information for its Forming Department for

Question

Badgersize Company has the following information for its Forming Department for the month of August: Work in Process Inventory, August 1: 20,000 units Direct materials: 100% complete $ 80,000 Conversion: 20% complete 24,000 Balance in work in process, August 1 $ 104,000 Units started during August 53,000 Units completed and transferred in August 59,000 Work in process (70% complete), August 31 ? Costs charged to Work in Process in August Direct materials $ 147,000 Conversion costs: Direct labor $ 104,000 Overhead applied 144,000 Total conversion $ 248,000 Assume materials are added at the start of processing. Instructions a. Calculate the equivalent units for the Forming Department for the month of August. b. Find the cost per equivalent unit of input resource. (Round your answers to 2 decimal places.)

I need a) equivalent units of Direct materials and Conversion. b) cost per equivalent unit of Direct materials and Conversion. Can you calculate it?

Explanation / Answer

Using FIFO method of process costing ,we will calculate cost per equivalent unit

Ending Work IN process = Beginning + started- Transfered out

                                    = 20000 + 53000- 59000

                                    = 14000 units

equivalent unit :

**If 20% complete in beginning then remaining 80 % complete during the year

Direct material Conversion cost Beginning WIP - 16000                [20000*.80]** Unit started and completed -Transfered out   [59000- 20000 Beginning ]= 39000 39000 Ending WIP 14000 9800         [14000*.70 complete ] equivalent unit   (ans to part a) 53000 64800 cost Incurred during the year 147000 248000 cost per equivalent unit 147000/53000 = $ 2.77 per equivalent unit 248000/64800 = $ 3.83

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.