Production records show that there were 540 units in the beginning inventory, 30

Question

Production records show that there were 540 units in the beginning inventory, 30% complete, 1,420 units started, and 1,410 units transferred out. The beginning work in process had materials cost of $2,910 and conversion costs of $1,670. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

The ledger of Custer Company has the following work in process account. Work in Process-Painting 5/1 Balance 4,580 5/31 Transferred out ? 5/31 Materials 5,960 5/31 Labor 5/31 Overhead 2,180 5/31 Balance 3,510

Explanation / Answer

Work in Process
5/1 Balance 4,580
5/31 Transferred out ?
5/31 Materials 5,960
5/31 Labor 3,510
5/31 Overhead 2,180
5/31 Balance ?


Production records show that there were 540 units in the beginning inventory, 30% complete, 1,420 units started, and 1,410 units transferred out. The beginning work in process had materials cost of $2,910 and conversion costs of $1,670. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

Prepare quantity schedule:
In process beginning 540
Started in the period 1420
Total to be accted for 1960
Transferred out 1410
In process ending 550 (balancing figure)
Total accted for 1960

Calculate equivalent units
(The question does not say FIFO or AVCO - hence AVCO is used)
Description ---- Total ---- Materials --Conversion
Transferred out 1410 ------1410 ----- 1410
In process ending 550 ------ 550 -------220 (550x40%)
Total EPU ---------------------1960 ------1630

Cost Schedule:

Materials:
In process beginning 2,910
Added in period 5,960
Total Materials cost 8,870
Equivalent units 1,960
Unit costs $4.53

Conversion:
In process beginning 1,670
Added during period
Labor ------------------ 3,510
Overheads ------------ 2,180
Total conversion costs7,360
Equivalent units ........ 1630
Unit costs $4.52

Cost of units transferred out 1,410 x ($4.53 + 4.52) = $12,747.60

Cost of in process inventory:
Materials 550 x $4.53 = $2,489.03
Conversion 220 x $4.52=993.37
Total cost ---------$3,482.40

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