Taco Ranch uses a process cost system and the weighted average cost flow assumpt
ID: 2542100 • Letter: T
Question
Taco Ranch uses a process cost system and the weighted average cost flow assumption. Production begins in the crafting department where materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. On November 1st, the beginning work in process inventory consisted of 10,000 units which were 60% complete and had a cost of $266,000, $140,000 of which were material costs. During November, the following occurred:
Materials added -- $315,000
Conversion costs incurred -- $67,500
Units completed and transferred out in November -- $55,000
Units in ending work in process November 30 (20% complete) -- $25,000
ANSWER THE FOLLOWING AND SHOW THE COMPUTATIONS THAT SUPPORT YOUR ANSWERS:
1. What are the equivalent units of production for materials and conversion costs in the Crafting Department for the month of November?
2. What are the costs assigned to the ending work in process inventory on November 30?
3. What are the costs assigned to units completed and transferred out during November?
My Worksheet (blue I have completed and hope is right) Thank you a. Equivalent units of production: Physical Unit Materials Conversion Cost Work in Process, November 1 Started and completed Work in process, November 30 Total 10,000 45,000 25,000 0 45,000 25,000 70,000 40%= 4,000 45,000 20%= 5,000 54,000 351,000/70,000 = 4.5 67,500/54,000 1.25 b. Materials unit cost $4.50 Conversion cost $1.25 Total unit cost $5.75 added 315,000 added 67,500 Cost to be accounted for Work in Process, November 1 Started in Production Total Cost $266,000 $382,500 $648,500 Cost assigned to work in process November 30 Materials cost Conversion cost TotalExplanation / Answer
b) Cost assigned to work in process November 30
Materials Cost = Equivalent units of Ending WIP*Materials unit cost
= 25,000 units*$4.50 = $112,500
Conversion Cost = Equivalent units of Ending WIP*Conversion cost
= 5,000 units*$1.25 = $6,250
Total Cost = Materials cost+Conversion cost
= $112,500+$6,250 = $118,750
c) Cost assigned to units completed and transferred out (Amount in $)
We can also verify the above computed costs
Cost to be accounted for = Cost assigned to WIP November 30+Total costs transferred out
$648,500 = $118,750+$529,750
Transferred Out Work in Process, November 1 266,000 Cost to completed beginning work in process (4,000 units for conversion cost*$1.25 per equivalent unit of conversion cost) 5,000 Total cost 271,000 Units started and completed (45,000 units*$5.75 per unit) 258,750 Total Costs transferred out (271,000+258,750) 529,750Related Questions
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