Alternate problem A Pare Aqua Company is a producer of flavored mineral water. T

Question

Alternate problem A Pare Aqua Company is a producer of flavored mineral water. These data are for its March production: Work in process inventory, March 1,3,000 (units equal cases): Direct materials Direct labor Manufacturing overhead (1,500 machine-hours at $6 per machine-hours) $12,600 6,000 9,000 $27,600 Units started in March t all wierc aompltee9,000 Costs incurred in March: Direct materials Direct labor Manufacturing overhead applied (13,800 machine-hours $36,360 55,200 The ending inventory consisted of 4,500 units (100% complete as to materials, 60% complete as to conversion). Compute the following: 1. Number of units completed and transferred to finished goods inventory. 2. The equivalent units of production for materials and conversion costs using the average cost method. 3. Cost per equivalent unit for materials and conversion costs. 4. Cost of units completed and transferred. 5. Cost of ending inventory 5

Explanation / Answer

1 Beginning work in process inventory 3000 Units started this period 9000 Total units to account for 12000 Units completed and transferred out to finished goods = 12000-4500= 7500 units 2 Equivalent units of production (EUP)- weighted average method Units %Materials EUP-Materials %Conversion EUP-Conversion Units completed and transferred out 7500 100% 7500 100% 7500 Ending work in process 4500 100% 4500 60% 2700 Total units 12000 12000 10200 Equivalent units of production (EUP): Materials 12000 Conversion costs 10200 3 Cost per equivalent unit of production Materials Conversion Cost of beginning work in process 12600 15000 Costs incurred in March 36360 138000 Total costs 48960 153000 ÷ Equivalent units of production 12000 10200 Cost per equivalent unit of production 4.08 15.00 Cost per equivalent unit of production: Materials 4.08 Conversion costs 15.00 4 Cost of units completed and transferred out: Direct materials 30600 =7500*4.08 Conversion costs 112500 =7500*15 Cost of units completed and transferred out 143100 5 Cost of ending work in Process inventory: Direct materials 18360 =4500*4.08 Conversion costs 40500 =2700*15 Cost of ending work in Process inventory 58860

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