The Polishing Department of Harbin Company has the following production and manu
ID: 2465844 • Letter: T
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
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(b)
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
Equivalent unit using FIFO:
Units transfered out = 1900 + 43500 -6100 = 39300
Material conversion Beginning WIP - 1330 [1900*.7] Started and transfered out [39300-1900] 37400 37400 Ending WIP 6100 610 [6100*.10] equivalent unit (ans to part a) 43500 39340 Cost inucrred during the year 196950 385500 [127210+258290] cost per equivalent unit (ans to part b) 4.53 [196950/43500] 9.80 [385500/39340]Related Questions
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