The Polishing Department of Harbin Company has the following production and manu

Question

The Polishing Department of Harbin Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process.

Production: Beginning inventory 1,900 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 43,500; ending inventory of 6,100 units 10% complete as to conversion costs.

Manufacturing costs: Beginning inventory costs, comprised of $20,970 of materials and $113,375 of conversion costs; materials costs added in Polishing during the month, $196,950; labor and overhead applied in Polishing during the month, $127,210 and $258,290, respectively.

(a)

Materials

Conversion Costs

The Polishing Department of Harbin Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process.

Production: Beginning inventory 1,900 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 43,500; ending inventory of 6,100 units 10% complete as to conversion costs.

Manufacturing costs: Beginning inventory costs, comprised of $20,970 of materials and $113,375 of conversion costs; materials costs added in Polishing during the month, $196,950; labor and overhead applied in Polishing during the month, $127,210 and $258,290, respectively.

Explanation / Answer

Calculation of the equivalent units of production Material Conversion Cost Units Percentage Equivelent Units Percentage Equivelent Beginning Inventory 1900 0 0 1900 70% 1330 Started & Transferred 37400 100 37400 37400 100% 37400 43500-6100 Ending 6100 100% 6100 6100 10% 610 Equivalent Units 43500 39340

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