Badgersize Company has the following information for its Forming Department for

Question

Badgersize Company has the following information for its Forming Department for the month of August:

     
   

  
   

Assume materials are added at the start of processing.

  
   

Calculate the equivalent units for the Forming Department for the month of August.

  
   

  
   

Find the cost per equivalent unit of the transferred units. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

  
    

   Work in Process Inventory, August 1: 20,000 units         Direct materials: 100% complete $ 80,000           Conversion: 20% complete 24,000           Balance in work in process, August 1 $ 104,000      Units started during August 53,000      Units completed and transferred in August 56,000      Work in process (70% complete), August 31 ?      Costs charged to Work in Process in August         Direct materials $ 127,000           Conversion costs:         Direct labor $ 122,000           Overhead applied 144,000      Total conversion $ 266,000  

Explanation / Answer

Production Cost Report
Forming Department
For the month of August

Part I. Physical Flow Total Units
Inputs:
Beginning WIP 20,000
Started 50,000
Units to account for: 70,000

Outputs:
Units completed 60,000
Ending WIP 10,000
Units accounted for: 70,000

Part II. Equivalent Units Direct Mat. Conv. Costs

Based on monthly input:
Finish BWIP 20,000 20,000
Start new units 50,000 50,000
Equivalent units of input 70,000 70,000

Based on monthly output:
Transferred units 60,000 60,000
EWIP units 10,000 7,000
Equivalent units of output 70,000 67,000

Part III. Cost Per Equivalent Unit Total DM Conv.
Unit Cost Costs Costs
Input costs in August $150,000 $252,000
Divide by equivalent units, August 70,000 67,000

Costs per equivalent unit, Aug. $5.90 $2.14 $3.76

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