\"I think we goofed when we hired that new assistant controller,\" said Ruth Sca
ID: 2393879 • Letter: #
Question
"I think we goofed when we hired that new assistant controller," said Ruth Scarpino, president of Provost Industries. "Just look at this report that he prepared for last month for the Finishing Department. I can’t understand it."
*Consists of cost transferred in, $4,280; materials cost, $2,010; and conversion cost, $2,220.
"He's struggling to learn our system," replied Frank Harrop, the operations manager. "The problem is that he's been away from process costing for a long time, and it's coming back slowly."
"It's not just the format of his report that I'm concerned about. Look at that $24.800 unit cost that he's come up with for April. Doesn't that seem high to you?" said Ms. Scarpino.
"Yes, it does seem high; but on the other hand, I know we had an increase in materials prices during April, and that may be the explanation," replied Mr. Harrop. "I’ll get someone else to redo this report and then we can see what’s going on."
Provost Industries manufactures a ceramic product that goes through two processing departments—Molding and Finishing. The company uses the weighted-average method in its process costing.
Required:
1-a. Calculate the equivalent units of production.
1-b. Calculate the cost per equivalent unit. (Round your answers to 2 decimal places.)
1-c. How much cost should have been assigned to the ending work in process inventory? (Round your intermediate calculations to 2 decimal places.)
1-d. How much cost should have been assigned to the units completed and transferred to finished goods? (Round your intermediate calculations to 2 decimal places.)
Thank you
Finishing Department costs: Work in process inventory, April 750 units; materials 100% complete; conversion 60% complete $ 8,510 * Costs transferred in during the month from thepreceding department, 2,250 units 22,870 Materials cost added during the month 8,766 Conversion costs incurred during the month 19,380 Total departmental costs $ 59,526 Finishing Department costs assigned to: Units completed and transferred to finished goods,
2,400 units at $24.800 per unit $ 59,526 Work in process inventory, April 30, 600 units;
materials 0% complete; conversion 50% complete 0 Total departmental costs assigned $ 59,526 I can't costs assigned
Explanation / Answer
Answers
Reconciliation of Units
Opening WIP
750
Introduced
2250
TOTAL
3000
Transferred
2400
Closing WIP
600
Statement of Equivalent Units
Cost transferred
Material
Conversion Cost
Units
Complete %
Equivalent units
Complete %
Equivalent units
Complete %
Equivalent units
Transferred
2400
100%
2400
100%
2400
100%
2400
Closing WIP
600
100%
600
0%
0
50%
300
Total
3000
Total
3000
Total
2400
Total
2700
Equivalent Units:
Cost transferred = 3000 units
Material = 2400 units
Conversion Cost = 2700 units.
Cost per Equivalent Units
COST
Cost Transferred
Material cost
Conversion cost
TOTAL
Included in Beginning Inventory
$ 4,280.00
$ 2,010.00
$ 2,220.00
$ 8,510.00
Cost incurred
$ 22,870.00
$ 8,766.00
$ 19,380.00
$ 51,016.00
Total cost
$ 27,150.00
$ 10,776.00
$ 21,600.00
$ 59,526.00
Total Equivalent Units
3000
2400
2700
Cost per Equivalent Units [Answers]
$9.05
$4.49
$8
Cost assigned to Ending Work in process of 600 units
Cost assigned = Equivalent Units x Cost per Equivalent Units
600 units x $ 9.05 (Cost transferred) = $ 5430
0 units x $ 4.49 (material) = $ 0
300 units x $ 8 (Conversion cost) = $ 2400
Total cost assigned = 5430 + 0 +2400 = $ 7,830
Cost assigned Units completed and transferred 2400 units
Cost assigned = Equivalent Units x Cost per Equivalent Units
2400 units x $ 9.05 (Cost transferred) = $ 21,720
2400 units x $ 4.49 (material) = $ 10,776
2400 units x $ 8 (Conversion cost) = $ 19,200
Total cost assigned = 21720 + 10776 + 19200 = $ 51,696
Reconciliation of Units
Opening WIP
750
Introduced
2250
TOTAL
3000
Transferred
2400
Closing WIP
600
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