The debits to Work-in-Process for Department #2 for the month of April of the cu

Question

The debits to Work-in-Process for Department #2 for the month of April of the current year, together with information concerning production, are presented below. All direct materials come from Department #1. The units completed include the 1,200 in process at the beginning of the period. Department #2 uses FIFO costing.

WORK-IN-PROCESS DEPARTMENT #2
1,200 units, ¼ completed
From Dept. 1, 6,000 units 3,600
Direct Labor 8,000
Factory OH 4,800

1,000 units, ½ complete ????

($1,200 Product X,6,200 units ????)outgoing

What are the total costs to be accounted for on the production cost report for Department #2 for the period?

Determine the equivalent units of production for conversion costs.

The conversion costs per equivalent units is?

The unit cost of Product X started and completed in the current period ?

The cost of goods transferred to finished goods?

The cost of the ending Work-in-Process Inventory is?

Explanation / Answer

Hi,

Please find the answer as follows:

Part A:

Total Costs to be Accounted For = 1200 + 3600 + 8000 + 4800 = $17600

Part B

Equivalent Units of Production for Conversion Costs = 1200*(.75) + 5000 + 1000*(.50) = 6400

Part C:

Conversion Costs per Equivalent Units = (8000 + 4800)/6400 = $2 per Unit

Part D:

Unit Cost of Product X Started and Completed in the Current Period = 3600/6000 + 2 = $2.60 per unit

Part E:

Cost of Goods Transferred to Finished Goods = (1200 + 900*2) + (5000*2.60) = $16000

Part F:

Cost of the Ending Work-in-Process Inventory = 1000*.60 + 500*2 = $1600

Thanks.

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