Badgersize Company has the following information for its Forming Department for
ID: 2453196 • Letter: B
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 55,000
Units completed and transferred in August 60,000
Work in process (70% complete), August 31 ?
Costs charged to Work in Process in August
Direct materials $ 126,000
Conversion costs:
Direct labor $ 114,000
Overhead applied 136,000 -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
Total conversion $ 250,000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
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.)
Explanation / Answer
Particulars Materials %completion Equivalent mat Conv Units %completion Equivalent Conv Units Opening WIP 20,000.00 100.00% 20,000.00 20,000.00 100.00% 20,000.00 Units started and completed(60,000-20,000) 40,000.00 100.00% 40,000.00 40,000.00 100.00% 40,000.00 Closing WIP(55000-40000) 15,000.00 100.00% 15,000.00 15,000.00 70.00% 10,500.00 Equivalent units 75,000.00 70,500.00 Opening WIP 80,000.00 24,000.00 Current Month Costs 126,000.00 250,000.00 Total costs 206,000.00 274,000.00 Per Equivalent Unit Cost 2.75 3.89 Note: Assumed Weighted Average Method in Absence of Information
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