2. Consider the following data for the Assembly Division of Fenton Watches Inc:

Question

2. Consider the following data for the Assembly Division of Fenton Watches Inc: ty Units Percentage Complete Materials Beginning work in 80 Conversion 40% 90% process Started in May 500 Completed during 460 May Ending work in 120 process (May 31) 60% 30% Conversion $91,040 Materials Beginning work in $493,360 process Costs added $3,220,000 $1,392,000 during May Required Assume the Assembly Division uses weighted average method. i. Compute the equivalent units for the direct materials and conversion costs. ii. Compute the cost per equivalent units for direct materials and conversion costs. ii. Determine the total costs of ending work in process. iv. Determine the total costs of units transferred out of the Assembly Division. V. Prepare a report that reconciles the total costs assigned to the ending work in process inventory and the units transferred out with the costs in the beginning inventory and costs added during the period.

Explanation / Answer

Req 1: Equivalent Units statement Material Conversion Units Input Particulars Units Output Equivalent units % complete Equivalent units % complete 80 Opening WIP 500 Input Finished Goods 460 460 100% 460 100% Closing WIP 120 72 50% 36 35% 580 580 532 496 Req 2:Statement Showing cost per unit Cost of Opening WIP Current Cost Total Equivalent units Cost per unit Material 493360 3220000 3713360 532 6980 Conversion 91040 1392000 1483040 496 2990 Cost per unit $9970 per unit Req 3&4 Cost of production summary Total cost of Completed Goods 4,586,200 (460 units@9970 per unit) Cost of Closing WIP 610200 Material (72*6980) 502560 Conversion(36*2990) 107640 Reconcilation Statement: Cost to be account for: Cost of Beginning WIP (493360+91040) 584400 Current cost (3220000+1392000) 4612000 Total cost to be account for 5196400 Total Cost accounted for: Cost of completed Goods 4586200 Cost of ending WIP 610200 Cost accounted for 5196400

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