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LINK TO TEXT LINK TO TEXT (a) Materials Conversion Costs Rivera Company has seve

ID: 2498383 • Letter: L

Question

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(a)

Materials

Conversion Costs

Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2014 totaled $2,224,974 as follows.
Work in process, November 1    Materials $79,110    Conversion costs 48,960 $128,070 Materials added 1,529,832 Labor 225,500 Overhead 341,572
Production records show that 34,640 units were in beginning work in process 30% complete as to conversion costs, 664,900 units were started into production, and 25,100 units were in ending work in process 40% complete as to conversion costs. Materials are entered at the beginning of each process.

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Explanation / Answer

Calculation of equivalent units of production:

Material

Conversion

Beginning work in process

0

24248

34640 *(1-100%)

34640 *(1-30%)

Units started and completed (664900 -25100)

639800

639800

Ending work in process

25100

10040

(25100*100%)

(25100*40%)

Total Equivalent Units

664900

674088

Calculation of unit production costs:

Material

Conversion

Cost incurred during November (A)

$          1,529,832

$                  567,072

(225500+341572)

Total Equivalent Units (B)

$              664,900

$                  674,088

Unit production costs =A/B

$                     2.30

$                         0.84

Calculation of equivalent units of production:

Material

Conversion

Beginning work in process

0

24248

34640 *(1-100%)

34640 *(1-30%)

Units started and completed (664900 -25100)

639800

639800

Ending work in process

25100

10040

(25100*100%)

(25100*40%)

Total Equivalent Units

664900

674088

Calculation of unit production costs:

Material

Conversion

Cost incurred during November (A)

$          1,529,832

$                  567,072

(225500+341572)

Total Equivalent Units (B)

$              664,900

$                  674,088

Unit production costs =A/B

$                     2.30

$                         0.84