Appendix EX 3-27 Equivalent units of production and related costs The charges to

Question

Appendix EX 3-27 Equivalent units of production and related costs The charges to Work in Process-Baking Department for a period as well as informa- tion concerning production are as follows. The Baking Department uses the average cost method, and all direct materials are placed in process during production. 820 units Work in Process-Baking Department 2,466 34,500 16,200 8,574 To Finished Goods, 8,100 units Bal, 900 units, 40% completed Direct materials, 8,400 units Direct labor Factory overhead Bal, 1,200 units, 60% completed Determine the following: a. The number of whole units to be accounted for and to be assigned costs b. The number of equivalent units of production c. The cost per equivalent unit d. The cost of units transferred to Finished Goods e. The cost of units in ending Work in Process

Explanation / Answer

Mental Corporation and Ocean company consolidated cash flow a) Determine the no of whole unit to be accounted for and be assigned cost Openig WIP 900 Unit add: units introduced 8400 unit total 9300 unit no of unit to be assigned costs transferred to finished goods 8100 ending inventory in process 1200 9300 b) Equivalent unit of production transferred to finished goods 8100 ending inventory in process(1200*60%) 720 total units 8820 c) cost per equivalent unit total prduction cost/ total equivalent unit opening balance of WIP 900 Direct material 34500 Direct labour 16200 factory overhead 8574 total production cost 60174 cost per equivalent unit = 60174/8820 = 7 d) cost of units tranferred to finished goods         8100*7 $ 56700 e) cost of units in ending WIP             720*7            = 5040

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