Problem 21-4A (Part Level Submission) (a) Materials Conversion Costs LINK TO TEX
ID: 2430505 • Letter: P
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Problem 21-4A (Part Level Submission)
(a)
Materials
Conversion Costs
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(b)
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(c)
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Problem 21-4A (Part Level Submission)
Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2017 totaled $2,280,000 as follows.Work in process, November 1 Materials $79,000 Conversion costs 48,150 $127,150 Materials added 1,589,000 Labor 225,920 Overhead 337,930
Production records show that 35,000 units were in beginning work in process 30% complete as to conversion costs, 660,000 units were started into production, and 25,000 units were in ending work in process 40% complete as to conversion costs. Materials are entered at the beginning of each process.
Explanation / Answer
Answers
STEP 1
Reconciliation of Units
Units
% already completed
% completed this period
Material
Conversion cost
Material
Conversion cost
Beginning WIP
35,000
100%
30%
0%
70%
Units introduced
660,000
Total units to be accounted for
695,000
Completed and Transferred unit
670,000
0%
0%
100%
100%
Ending WIP
25,000
0%
0%
100%
40%
Equivalent Units
Total Units
Materials
Conversion Cost
Units Transferred:
% completed this period
Equivalent Units
% completed this period
Equivalent Units
From WIP
35,000
0%
-
70%
24,500
From units started
635,000
100%
635,000
100%
635,000
Total
670,000
635,000
659,500
Total Units
Materials
Conversion Cost
Ending WIP
3300
% completed this period
Equivalent Units
% completed this period
Equivalent Units
Total
25,000
100%
25,000
40%
10,000
Total EUP [Requirement (a)
695,000
660,000
669,500
Equivalent units: Material = 660,000 units ; Conversion Cost = 669,500 units
STEP 3
Cost per Equivalent Units AND Cost to be accounted for
Materials
Conversion Cost
TOTAL
Cost incurred in Current Period
$ 1,589,000.00
$ 563,850.00
$ 2,152,850.00
Total Equivalent Units
660,000.00
669,500.00
Cost per Equivalent Units
$ 2.41
$ 0.84
Cost of Beginning WIP
$ 79,000.00
$ 48,150.00
$ 127,150.00
Total cost to be accounted for
$ 2,280,000.00
Cost per unit: Material = $ 2.41; Conversion cost = $ 0.84
STEP 4
Cost report [Including Reconciliation]
Cost of
Units Transferred
670,000.00
units
Equivalent Units [Step 2]
Cost per Equivalent Units [Step 3]
Cost of Units Transferred
TOTAL
A
Materials
635,000
$ 2.41
$ 1,530,350.00
B
Conversion Costs
659,500
$ 0.84
$ 553,980.00
C=A+B
Total
$ 2,084,330.00
D
Cost of Beginning WIP
$ 127,150.00
E=C+D
Total Cost of Units transferred
$ 2,211,480.00
Cost of
Ending WIP
25,000.00
units
Equivalent Units [Step 2]
Cost per Equivalent Units [Step 3]
Cost of Ending WIP
TOTAL
F
Materials
25,000
$ 2.41
$ 60,250.00
G
Conversion Costs
10,000
$ 0.84
$ 8,400.00
H = F + G
Total Cost of Ending WIP
$ 68,650.00
I = E + H
Total Cost accounted for
$ 2,280,130.00
J
Rounding Off Differences
-130
K = I + J
Total cost to be accounted for [equals to computed in STEP 3]
$ 2,280,000.00
STEP 1
Reconciliation of Units
Units
% already completed
% completed this period
Material
Conversion cost
Material
Conversion cost
Beginning WIP
35,000
100%
30%
0%
70%
Units introduced
660,000
Total units to be accounted for
695,000
Completed and Transferred unit
670,000
0%
0%
100%
100%
Ending WIP
25,000
0%
0%
100%
40%
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