4. The records of Westminster Manufacturing Company for the month of May show th

Question

4. The records of Westminster Manufacturing Company for the month of May show the following costs in Department A Beginning Inventory Direct Materials Direct Labor Overhead (150% of Direct Labor Cost) 120,750 405,000 535,500 Total $1,864,500 The beginning inventory for May consisted of 10,000 units which were 80% complete as to direct materials and 60% complete as to labor and overhead. A total of 90,000 units were started and completed during May, and 20,000 units remained in the work in proces inventory. The ending inventory was 80% complete as to direct materials and 40% complete as to labor and overhead. Complete the following table and the blanks following | EU % added 20% Equivalent Units of Material: Units Beginning Inventory Started and Completed Ending Inventory 90,000 20,000 Total DM cost per EU- : |Units |%added tu Equivalent Units of Labor and MOH (Conversion) Invent 10,000 Be Started and Completed Ending Inventory 100% Conversion cost per EU- $1,338,750/102,000 S120,750 Costs from beginning work in process Cost to complete beginning inventory Material Conversion (4,000 13.125) Cost of units started and completed in May Total cost of 100,000 completed units Total cost of ending work in process: Material Conversion Total 10

Explanation / Answer

Equivalent Units of Material Units % added EU beginning Inventory 10000 20% 2000 Started and completed 90000 100% 90000 Ending Inventory 20000 80% 16000 Total 120000 108000 DM cost per EU 405000/108000 3.75 Equivalent units of Labor and MOH Units % added EU beginning Inventory 10000 40% 4000 Started and completed 90000 100% 90000 Ending Inventory 20000 40% 8000 Total 120000 102000 Conversion cosr per EU 13.125 (535500+803250)/102000 1338750 405000 Cost from beginning WIP 120750 Cos to completed beginning invnetory Materail (3.8*2000) 7500 Conversion (4000*13.125) 52500 Cost of units started and compelted in May; 1518750 90000*(3.75+13.125) Total cost of 100000 completed units 1699500 Total cost of Ending WIP Materail (3.75*16000) 60000 Conversion (8800*13.125) 105000 Total 165000 Ans a a) $3.75 b) Equivalent units of material 108000 and conversion 102000 c) Tital cost of 100000 units completed 1699500 d) Ending WIP $165000

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