Exercise 17-3 The ledger of American Company has the following work in process a

Question

Exercise 17-3 The ledger of American Company has the following work in process account. Work in Process-Painting 5/1 Balance 3,790 5/31 Transferred out? 5/31 Materials5,970 5/31 Labor 5/31 Overhead 2,280 5/31 Balance 4,630 Production records show that there were 580 units in the beginning inventory, 304% compiete. 1,680 units started, and 1,480 units transferred out. The beginning work in process had materials cost of $3,040 and conversion costs of $750. The units in ending inventory were 40% complete. Maternals are entered at the beginning of the painting process. How many units are in process at May 31? 780 units LINK TO TEXT LINK TO TEXTLINK TO TEXT What is the unit materials cost for May? (Round unit cost to 3 decimal places, e.g. 2.257.) The unit materials cost for May s 3.99 LINK TO TEXT LINK TO TEXT LN TO TT Od 210PM e to search

Explanation / Answer

a) Units in ending work in process = (580+1680-1480) = 780 units

b) Unit cost of material = (3040+5970)/(1480+780) = 3.99 per unit

c) Unit cost of conversion = (750+4630+2280)/(1480+780*40%) = 4.27 per unit

d) Cost of units transferred out = (3.99+4.27)*1480 = 12225

e) Cost of ending work in process = (780*3.99+312*4.27) = 4445

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