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 4,550 5/31 Transferred out ? 5/31 Materials 7,050 5/31 Labor 2,930 5/31 Overhead 1,550 5/31 Balance ? Production records show that there were 540 units in the beginning inventory, 30% complete, 1,450 units started, and 1,530 units transferred out. The beginning work in process had materials cost of $2,850 and conversion costs of $1,700. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

Explanation / Answer

Custer Company Calculation of WIP at May 31 Work in Process May 1 540 Started into production 1450 Total units 1990 Less: Transferred out -1530 Work in Process May 31 460 Unit Material & conversion cost Material Units completed & transferrd out 1530 Ending WIP 460 Production 1990 Total Material Cost $          9,900.00 Cost per unit $                  4.97 Conversion Units completed and transferred out 1530 Ending WIP 184 Production Units 1714 Total conversion cost= $          6,180.00 Cost per unit= $                  3.61 Total cost of units transferred out in may Material $          7,604.10 Conversion $          5,523.30 Total cost of transferred out $       13,127.40 Cost of inventory May 31st Material $          2,288.44 Conversion $             663.43 Total cost of May 31st inventory $          2,951.87

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