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

Hi,

Please find the answer as follows:

Answer is Direct Materials = 53000 and Conversion = 63900.

Part B:

Deparment Costs:

Materials = 127000

Conversion = 122000 + 144000 = 266000

Cost Per Equivalent Units (Material) = Material Cost/Equivalent Units for Material = 127000/53000 = 2.40

Cost Per Equivalent Units (Conversion) = Conversion Cost/Equivalent Units for Conversion = 266000/63900 = 4.16

Answer is Direct Materials = 2.40 and Conversion = 4.16.

Thanks.

Units to Account For Physical Units

Opening Work-in-Process inventory     20,000

Units Started during the Period     53,000

Total Units to Account for     73,000



Equivalent Units Units Accounted For

Materials Conversion Costs Opening Work-in-Process Inventory     20,000
               -                        16,000 Started and Completed     36,000
    36,000                      36,000 Closing Work-in-Process Inventory     17,000
    17,000                      11,900 Total Units accounted for     73,000
    53,000                      63,900 Equivalent Units

53,000
63,900

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