The Assembly Department uses a process cost accounting system. The department ad
ID: 2544743 • Letter: T
Question
The Assembly Department uses a process cost accounting system. The department adds materials and incurs conversion costs uniformly throughout the process. During May, $200,000 of materials costs and $95,000 in conversion costs were charged to the
department. The beginning Work in Process inventory was $63,000 on May 1, comprised of $40,000 of materials costs and $23,000 of conversion costs. The company employs the FIFO method of process costing.
Other data for the month of May are as follows:
Beginning Work in Process inventory, 5/1 25,000 units (40% complete)
Units completed and transferred out 50,000 units
Ending Work in Process inventory, 5/31 30,000 units (30% complete)
Fill in the blanks below based on the information above:
A. How many physical units have to be accounted for in May? [80000] units
B. What are the equivalent units of production for materials for the month of May? [49000] EUP
C. What are the equivalent units of production for conversion costs for the month of May? [49000] EUP
D. What is the total cost assigned to one equivalent unit of production during the in May? $[6.02] rounded to the nearest $0.01.
E. Using the rounded result obtained in ‘D’ above, what is the total cost assigned to the 50,000 units that were transferred out of the Assembly Department in May? $[303800] rounded to the nearest $1
F. What is the total cost of the May 31 inventory? $[54180] rounded to the nearest $1
Explanation / Answer
UNITS TO ACCOUNT FOR: Beginning Work in Process units 25,000 Add: Units Started in Process 55,000 Total Units to account for: 80,000 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 25000 Units started and completed 25,000 Ending Work in Process 30,000 Total Units to be accounted for: 80,000 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units completed from Beg. WIP 60% 15,000 60% 15,000 Units started and completed 100% 25,000 100% 25,000 Ending Work in Process 30% 9,000 30% 9,000 Total Equivalent units 49,000 49,000 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 200,000 95,000 Equivalent Units 49,000 49,000 Cost per Equivalent unit 4.08 1.94 TOTAL COST ACCOUNTED FOR: Units Completed from Beginning WIP (25000 units) Equivalent unit Cost per EU Total Cost Beginning Cost 63000 Material 15,000 4.08 61200 Conversion Cost 15,000 1.94 29100 Cost of units completed from Beg WIP 153300 Units started and Transferred out (25,000 units) Equivalent unit Cost per EU Total Cost Material 25,000 4.08 102000 Conversion Cost 25,000 1.94 48500 Total Cost of Units completed and transferred out: 150500 Ending Work in process (30,000 units) Equivalent unit Cost per EU Total Cost Material 9,000 4.08 36720 Conversison Cost 9,000 1.94 17460 Total cost of Ending Work in process: 54,180 Req 1: Total units to be accounted for: 80,000 units Req b: Equivalent untis of Material: 49000 units Req C: Equivalent units off converion: 49000 units Req D: Cost per unit (4.08+1.94): $ 6.02 per unit Req E: Total cost assigned to 50000 units: 153300+150300 = $ 303600 (difference due to rounding off) Req E: Cost of Ending Inventory of Wip $ 54180
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