a. Calculate the cost per equivalent unit for each of the three cost items and i
ID: 2488112 • Letter: A
Question
a. Calculate the cost per equivalent unit for each of the three cost items and in total. Round to 3 decimal places.
b. Calculate the cost of items completed in May and the cost of ending Work in Process. Round to 2 decimal places.
c. Reconcile the sum of the two costs in part b to the sum of beginning Work in Process and costs added in May.
Problem 3-1 Comprehensive Problem, One Department [LO3,4] Regal Polish manufactures a single product in one dapartment and uses a process costing system. At the start of May, there were 11,000 units in process that were 100 percent complete with respect to direct material and 60 percent complete with respect to conversion costs (labor and overhead). During the month, the company began production of 105,000 units. Ending work in process inventory consisted of 5,100 units that were 100 percent complete with respect to material and 70 percent complete with respect to conversion costs. Requireda. Calculate the cost per equivalent unit for each of the three cost items and in total. Round to 3 decimal places.
b. Calculate the cost of items completed in May and the cost of ending Work in Process. Round to 2 decimal places.
c. Reconcile the sum of the two costs in part b to the sum of beginning Work in Process and costs added in May.
Cost Information Beginning Work in Process Costs Added in May Direct material $4,000 $76,500 Direct labor 200 8,880 Manufacturing overhead 300 9,915 Total $4,500 $95,295Explanation / Answer
The denominators for the calculations of cost per equivalent are:
Units Completed Equivalent Units in Ending WIP Total
Material 110,900 5,100 116,000
Labor 110,900 3,570 114,470
Overhead 110,900 3,570 114,470
Beginning WIP Cost Added Total Denominator Cost per EU
Material $4,000 $76,500 $80,500 116,000 $0.69
Labor 200 8,880 9,080 114,470 0.08
Overhead 300 9,915 10,215 114,470 0.09
Total $4,500 $95,295 $99,795 $0.86
119,000 units × $0.86 = $102,340
Cost of items in ending work in process:
Material (5,100 equivalent units × $0.69) $3,519
Labor (3,570 equivalent units × $0.08) 285.6
Overhead (3,570 equivalent units × $0.09) 321.3
Total $4,125.9
Cost added 95,295
Total $99,795
Cost of items completed $95,669
Cost of ending WIP 4,125.9
Total $99,795
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