The ledger of American Company has the following work in process account. Work i

Question

The ledger of American Company has the following work in process account.

Work in Process—Painting

Production records show that there were  400 units in the beginning inventory, 30% complete,  1,700 units started, and  1,500 units transferred out. The beginning work in process had materials cost of $ 3,140 and conversion costs of $ 550. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

A. What is the unit conversion cost for May? (Round unit cost to 2 decimal places, e.g. 2.25.)

$ enter a dollar amount of the unit conversion cost for May rounded to 2 decimal places

B. What are the total costs of units transferred out in May?

C. What is the cost of the May 31 inventory?

Work in Process—Painting

5/1 Balance 3,690 5/31 Transferred out ? 5/31 Materials 5,890 5/31 Labor 5,252 5/31 Overhead 1,680 5/31 Balance ?

Explanation / Answer

Equivalent units for materials = 1500+600= 2100 Unit materials cost for May = (3140+5890)/2100= $4.3 a Equivalent units for conversion costs = 1500+(600*40%)= 1740 Unit conversion cost for May = (550+5252+1680)/1740= $4.3 b Total costs of units transferred out in May = 1500*(4.3+4.3)= $12900 c Cost of the May 31 inventory = (600*4.3)+(600*40%*4.3)= $3612

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