PROCESS COSTING Instructions: Using the following data, complete the requirement

Question

PROCESS COSTING
Instructions: Using the following data, complete the requirements given below.

The Machining Department of Sinclair Corporation reports the following for October 2017:

Production: All materials are added at the beginning of the process. Beginning work in process 20,000 units, 40% complete. Units started into production 200,000 units. Ending work in process 10,000 units, 70% complete.

Manufacturing Costs: Beginning work in process, $45,000, comprised of $17,000 of materials and $28,000 on conversion costs. Materials added $203,000; labor and overhead added $774,900.

1. Compute equivalent units of production for (1) materials and (2) conversion costs.

                   Materials Conversion

2. Compute the unit costs for the month.

                       Materials Conversion

Explanation / Answer

Units transfered out =20000 +    200,000 - 10000 = 210,000

out of units transfered out ,assuming FIFO method is use , 20000 units are transfered from beginning inventory and remaining from started this month = 210000 -20000 = 190000 units

190,000

2)

Material conversion cost Beginning units - 12000              (20000*.60) units started and transfered out 190,000

190,000

ending inventory 10000 7000            (10000 * .7) equivalent units 200,000 209000

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