The ledger of Custer Company has the following work in process account. Work in

Question

The ledger of Custer Company has the following work in process account.

Work in Process—Painting

5/1

Balance

3,590

5/31

Transferred out

?

5/31

Materials

5,160

5/31

Labor

2,740

5/31

Overhead

1,380

5/31

Balance

?

Production records show that there were 400 units in the beginning inventory, 30% complete, 1,400 units started, and 1,500 units transferred out. The beginning work in process had materials cost of $2,040 and conversion costs of $1,550. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

Instructions

How many units are in process at May 31?

What is the unit materials cost for May?

What is the unit conversion cost for May?

What is the total cost of units transferred out in May?

What is the cost of the May 31 inventory?

Work in Process—Painting

5/1

Balance

3,590

5/31

Transferred out

?

5/31

Materials

5,160

5/31

Labor

2,740

5/31

Overhead

1,380

5/31

Balance

?

Explanation / Answer

Custer Company Details Units % Material Eq Unit Material % Conversion Eq Unit Conversion Opening Inventory                400 100%             400 30%          120 Units started             1,400 Total Input             1,800 Output Trasferred out             1,500 100%         1,500 100%       1,500 Closing Inventory                300 100%             300 40%          120 Total Equivalent units             1,800         1,800       1,620 Costs to be accounted Materials Conversion Total Opening Inventory             2,040         1,550         3,590 Incurred in the month             5,160         4,120         9,280 Total             7,200         5,670       12,870 Total Equivalent units             1,800         1,620 Cost per Equivalent Unit $           4.00 $       3.50 Cost Allocation Materials Conversion Total Eq units Transferred out             1,500         1,500 Cost per Equivalent Unit $           4.00 $       3.50 Cost of Units Transferred Out $        6,000 $    5,250       11,250 Eq units in Closing Inventory          300.00      120.00 Cost of Closing inventory $ 1,200.00 $ 420.00         1,620 a Units in Process on May 31= 300 units b Unit Material cost for May = $           4.00 c Unit Conversion cost for May $           3.50 d Total Cost of Units Transferred in May $      11,250 e Cost of Ending inventory May 31. $        1,620

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