Ghose Company manufactures basketballs. Materials are added at the beginning of
ID: 2353085 • Letter: G
Question
Ghose Company manufactures basketballs. Materials are added at the beginning of the production process and conversion costs are incurred uniformly. Production and cost data for the month of July 2011 are as follows.Production Data-Basketballs Units Percent Complete
Work in process units, July 1 500 60%
Units started into production 1,000
Work in process units, July 31 600 30%
Cost Data - Basketballs
Work in process, July 1
Materials $750
Conversion costs 600 $1,350
Direct materials 2,400
Direct labor 1,580
Manufacturing overhead 1,060
Calculate the following. (Round unit costs to 2 decimal places, e.g. 2.25. Use rounded amounts for successive calculations. Round all other answers to 0 decimal places, e.g. 125.)
1 The equivalent units of production for materials and conversion.
Materials :
Conversion costs :
2 The unit costs of production for materials and conversion costs.
Unit cost-Materials $ : 2,1
Unit cost-Conversion costs $ :
The assignment of costs to units transferred out and in process at the end of the period.
Costs accounted for
Transferred out $:
Work in process, July 31
Materials $: 1,260
Conversion costs:
Total costs $:
Explanation / Answer
The equivalent units of production for materials and conversion. Material Conversion cost Units Amount Units Amount Balance on July 1 500 750 300 1,350 Addition 1000 2,400 1,000 2,640 Total 1500 3,150 1,300 3,990 Less: Work in process (closing) 600 1,260 180 552 Cost of finished product 900 1,890 1,120 2,838 ===== ===== ==== ===== Materials: 900 units $ 1,890 Conversion costs : 1,120 units $2,838 The unit costs of production for materials and conversion costs. Unit cost-Materials $2.1 Unit cost-Conversion costs $2.53 The assignment of costs to units transferred out and in process at the end of the period. Costs accounted for Transferred out $4,728 Work in process, July 31 Materials $1,260 Conversion costs $552 Total costs $1,812
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