The Polishing Department of Harbin Company has the following production and manu

Question

The Polishing Department of Harbin Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process. Production: Beginning inventory 1,500 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 40,900; ending inventory of 5,400 units 10% complete as to conversion costs. Manufacturing costs: Beginning inventory costs, comprised of $21,570 of materials and $71,968 of conversion costs; materials costs added in Polishing during the month, $173,470; labor and overhead applied in Polishing during the month, $127,730 and $258,290, respectively. a) Compute the equivalent units of production for materials and conversion costs for the month of September. b) compute the units costs for materials and conversion costs for the month. c) determine the costs to be assigned to the units transferred out and in process.

Explanation / Answer

a) Answer: Equivalent units using weighted average method: Completed and transferred = 10000 * 100 % = 10000 In process = 10000 * 50 % = 5000 Equivalent units = 15000 units When computing equivalent units using the weighted average method, ignore the beginning inventory. Finished and transferred should be given one hundred percent completion rate. In process shall be multiplied by its corresponding completion rate. b)

FIFO:

Look at your textbook, page 256, for the basic table shown for FIFO.

Again, recall this chart is telling you the total

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