Whole Transferred Direct Conversion UNITS Units In Materials Costs Units to acco

Question

Whole Transferred Direct Conversion UNITS Units In Materials Costs Units to account for 200 1,900 Beginning work-in-process Started in production Total units to account for Units accounted for (b) a 200 n/a Completed and transferred out Ending work-in-process Fn (c) a Total units accounted for Transferred Direct Conversion Total COSTS In Materials Costs Costs Costs to account for: 0) S 3,392 n/a nla n/a n/a n/a 900 13,380 Beginning work-in-process 1,750 Costs added during period Total costs to account for Divided by: Total EUP Cost per equivalent unit Costs accounted for: 4,242 18,522 n/a nla nla Completed and transferred out Ending work-in-process () 18,522

Explanation / Answer

Ans. The questions have several parts and I will go one-by-one from alphabets a. to y.

a. 2100 (add Beginning WIP and production)

b.1900 (c minus Ending WIP)

c 2100 (Total units to account for = Total units accounted for)

Completed and transferred out means that goods have been 100% produced and have gone through stages of Direct Materials and Conversion costs. Therefore, answer of "d" and "g" will be "b".

PLEASE NOTE THE ASSUMPTION: The WIP of 200 units will be in different stages of production. The question does not mention how many goods are in Direct Materials stage and how many are in Conversion stage. I am assuming 50% each i.e 100 units WIP for both stages. Essentially, this means that we have expensed 50% cost for 200 units in both the stages.

d. $1900

e. 100

f/ 2000

g. 1900

h. 100

i. 2000

j $850 (4242 - 3392)

k. 16772 (13380 + 3392)

l. 14280 (900 + 13380)

Answers for "m" and "n" are total goods accounted for Direct Materials and Conversion Costs respectively.

m. 2000

n. 2000

o. Average cost = Total cost/EUP = Divide "l" by "o" = 14280/2000 = $7,14

p. Divide 4242/n = 4242/2000 = $2.121

q. This is total cost per EUP = add "o" and "p" = $7.14+$2.121 = $9.621

r. Average Cost of Direct Materials multiplied by Completed and transferred out units = "o" X "d" = $7.14*1900 = 13566

s. Similar concept for conversion costs = "p" X "g" = $2.121*1900 = 4029.9

t. "r" + "s" = 13566 + 4029.9 = 17595.9

u. "o" X "e" = $7.14 X 100 = $714

v. "p" X "h" = $2.121*200 = 212.1

w. "u" + "v" = 714 + 212.1 = 926.1

x. "r" + "u" = 13566 + 714 = 14280 (this should match "l")

y. "s" + "v" = 4029.9+212.1 = 4242

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