The charges to Work in Process—Assembly Department for a period, together with i

Question

The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.

a. Based on the above data, determine the different costs listed below.

If required, round your interim calculations to two decimal places.

b. Did the production costs change from the preceding period?
Yes

c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?
Increase

Work in Process—Assembly Department Bal., 2,000 units, 75% completed 10,000 To Finished Goods, 46,000 units ? Direct materials, 47,000 units @ $2 94,000 Direct labor 139,600 Factory overhead 54,330 Bal. ? units, 20% completed ?

Explanation / Answer

UNITS TO ACCOUNT FOR: Whole units Beginning WIP 2000 Units introduced during the period 47000 Total units to account for 49000 UNITS ACCOUNTED FOR: Equivalent Units Material Conversion Cost Beginning WIP completed during the period 2000 0 500 Units introduced and completed 44000 44000 44000 Total units completed and transferred out 46000 44000 44500 Ending WIP 3000 3000 600 Total units accounted for 49000 47000 45100 Material Cost Conversion Cost Total Cost Costs added during the period 94000 193930 287930 Cost per equivalent unit 2.00 4.30 6.30 COSTS TO ACCOUNT FOR: Beginning WIP 10000 Costs added during the period 94000 193930 287930 94000 193930 297930 COSTS ACCOUNTED FOR: Beginning WIP cost 10000 Costs to complete beginning WIP 0 2150 2150 Cost of beginning WIP completed during the period 0 2150 12150 Cost of units introduced and completed during the period 88000 189200 277200 Cost of units transferred to finished goods during the period 88000 191350 289350 Cost of ending WIP 6000 2580 8580 Total costs accounted for 94000 193930 297930 a. Based on the above data, determine the different costs listed below. 1. Cost of beginning work in process inventory completed this period. $     12,150.00 2. Cost of units transferred to finished goods during the period. $ 2,89,350.00 3. Cost of ending work in process inventory. $       8,580.00 4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent = 12150/2000 $             6.08 b. Did the production costs change from the preceding period? Yes. (The average price of $6.08 at a-4 above, is different from the total cost per equivalent unit during the period of 6.30 per unit) c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period? Increase (Beginning WIP material cost = 2000*2 = 4000 So Conversion cost = 10000-4000 = 6000 Previous cost per equivalent unit for conversion cost = 6000/1500 = $4.00 Current period conversion cost per equivalent unit is more at $4.30)

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