Exercise 16-8 (Part Level Submission) The Blending Department of Luongo Company

Question

Exercise 16-8 (Part Level Submission) The Blending Department of Luongo Company has the following cost and production data for the month of April.

Costs:    Work in process, April 1       Direct materials: 100% complete $110,000       Conversion costs: 20% complete 77,000          Cost of work in process, April 1 $187,000    Costs incurred during production in April       Direct materials $880,000       Conversion costs 401,500          Costs incurred in April $1,281,500
Units transferred out totaled 18,700. Ending work in process was 1,100 units that are 100% complete as to materials and 40% complete as to conversion costs.

QUESTION 1) Compute the equivalent units of production for (1) materials and (2) conversion costs for the month of April.

QUESTION 2) Compute the unit costs for the month. The Blending Department of Luongo Company has the following cost and production data for the month of April. Units transferred out totaled 18,700. Ending work in process was 1,100 units that are 100% complete as to materials and 40% complete as to conversion costs. Compute the equivalent units of production for (1) materials and (2) conversion costs for the month of April. Compute the unit costs for the month.

Explanation / Answer

(a) Compute the equivalent units of production for materials and conversion costs for the month of April.

Equivalent units of materials = 15000
Equivalent units of conversion costs = 14400



(b) Compute the unit costs for the month. (Round unit costs to 0 decimal places, e.g. $25.)

Unit cost for the month = 78.472

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