The general ledger of Oates Company has the following work in process account. W

Question

The general ledger of Oates Company has the following work in process account.
Work in Process-Finishing
6/1 Balance 8,000 Transferred out ? 6/30 Materials 1,800 6/30 Labor 3,800 6/30 Overhead 2,800 6/30 Balance ?
Production records show that there were 2,000 units in the beginning inventory, 50% complete, 8,000 units started, and 4,500 units transferred out. The beginning work in process had conversion costs of $3,150. The units in ending inventory were 60% complete. Materials are added at the beginning of the process.
(A) How many units are in process at June 30? (B) What is the unit conversion cost for June? (C) What is the conversion cost in the June 30th inventory?? The general ledger of Oates Company has the following work in process account.
Work in Process-Finishing
6/1 Balance 8,000 Transferred out ? 6/30 Materials 1,800 6/30 Labor 3,800 6/30 Overhead 2,800 6/30 Balance ?
Production records show that there were 2,000 units in the beginning inventory, 50% complete, 8,000 units started, and 4,500 units transferred out. The beginning work in process had conversion costs of $3,150. The units in ending inventory were 60% complete. Materials are added at the beginning of the process.
(A) How many units are in process at June 30? (B) What is the unit conversion cost for June? (C) What is the conversion cost in the June 30th inventory?? The general ledger of Oates Company has the following work in process account.
Work in Process-Finishing
6/1 Balance 8,000 Transferred out ? 6/30 Materials 1,800 6/30 Labor 3,800 6/30 Overhead 2,800 6/30 Balance ?
Production records show that there were 2,000 units in the beginning inventory, 50% complete, 8,000 units started, and 4,500 units transferred out. The beginning work in process had conversion costs of $3,150. The units in ending inventory were 60% complete. Materials are added at the beginning of the process.
(A) How many units are in process at June 30? (B) What is the unit conversion cost for June? (C) What is the conversion cost in the June 30th inventory??

Explanation / Answer

(a) Work in process, June 1 2,000 Units

Started into production 8,000 Units

to be accounted for 10,000Units

Less: Transferred out 4,500 Units

Work in process, June 30 5,500Units

(b) Conversion costs    Physical Units Equivalent Units

Transferred out 4,500 4,500

Work in process, June 30 5,500 3,300 (5,500 × .60)

Total   10,000 7,800

Unit conversion cost = ($3,150 + $3800+$2800) ÷ 78,00 = $1.25

(c) Conversion cost in June 30 inventory: 3,300 × $1.25 = $4125

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